low interest student loans

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

Stafford Loan

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.

Perkins Loan

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.

Going off to college can be a major turning point in the lives of many teenagers and adults. One of the key factors that everyone must consider is the funding. After all, how are you going to afford your college education? Just to give you an idea, things you might need money for are tuition, textbooks, housing, food, and transportation. While can a part-time job, this may not cover all of the fees you encounter at a university. Yes indeed; college can be expensive. This is why so many people check into low interest student loans for higher learning. This is what is wonderful about college life, no one expects you to have any money, so interest rates on student loans are typically low. Much lower than you will encounter with the majority of credit card companies these days.

Where do you get started seeking out low interest student loans? Well, a wonderful place to begin is with a financial advisor. If you haven’t already, speak with a financial advisor at the university or community college you’re going to attend. Online you can also check out helpful websites like WellsFargo.com, cuStudentLoans.org, and EmigrantDirect.com. Any of these can get you started on the right track to low interest student loan options. The key is exhausting your resources. After all, you need to fully understand what is out there is you plan on getting the right loans with the lowest interest rates possible. Again, a financial advisor can assist you with this and it will not even cost you a dime. These professionals work through the universities and are there to help the students.

Know the difference between subsidized and unsubsidized student loans. This will absolutely make a difference to you in the long run. If the low interest student loans are subsidized by the government, this means that they do not accrue interest while you are in school. Once you have finished college, the lenders allow six months before you start getting billed to pay the loans back. At this point interest accrues on the loan or loans. With unsubsidized loans, the interest begins immediately after you get the sum of money for college. This means you will be paying interest from the get-go, which is not desirable. Therefore you should always strive to acquire subsidized loans first. While you may or may not be approved, it is worth a try regardless.

It does not matter if you are a teenager just out of high school or an individual in his or her forties, you can still acquire low interest student loans for a college education. A lot depends on the amount of money you currently make. If you make a lot, then you will be less likely to get a large sum in loan money.