Finding a low interest student loan might turn out to be easier than you realize. For the best low interest rates on student loans you should turn to the federal student loans. Federal student loans carry a much lower rate of interest on its student loans than the rate of interest on a private student loan.
In addition to getting a low interest rate on your loan, you could end up with a federal student loans that is also subsidized. Federal loans that are subsidized usually have the government paying the interest rate on the loan while you are studying and also for a set period usually 6 to 9 months after you graduate from school.
Let’s take a look at the two main low interest federal student loans
A federal Stafford loan comes with a max interest rate in the vicinity of 8% – 8.2%. Most students get better interest rates than that. The best part of a Stafford loan is that there is no credit worthiness requirement or even checking your credit score for that matter. All that matters is that you do not have a loan default and that you fall in the low income bracket. Stafford loans come as subsidized and unsubsidized. Getting a subsidized Stafford loan would mean not paying any interest payments while you are studying in school and for the preset period once you graduate. Read more about Stafford loans.
The second low interest federal student loan is the Perkins loan. To be eligible for the Perkins loan you have to show extreme financial difficulties in your FAFSA application. Some of the terms of the Perkins loan cannot be beat. Perkins loan has the best grace period for a loan, almost 9 months after you graduate. Perkins loans also have a very low interest rate of around 5%. A student loan with an interest rate of 5% cannot be beat in the current market and is quite simply the most affordable interest rate on a student loan. Perkins loans also have loan deferment, loan forbearance and loan forgiveness options provided you qualify ofcourse. Read more about Perkins loans.
How to apply for a low interest student loan?
Applying for the two low interest student loans mentioned above starts with the FAFSA application. Be aware of deadlines and make sure you apply well in advance to give you the best chance to qualify. Usually you will have to circle back a couple of times on your loan application and therefore it is important you apply in advance so that you do not run out of time. Federal loans require a fair amount of paperwork to be done and will involve liaising with your college financial office as well.
While applying for a scholarship or grant always takes precedence over a loan, when it comes to student loans, nothing can beat the comfort of a low interest student loan. Federal loans are the best when it comes to securing a low interest rate and must be explored by all students before considering a private loan where credit scores, credit history and credit worthiness plays a major part in the interest rates that are quoted on a student loan.
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