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Obtaining the lowest interest rate you possibly can is really important. It'll save you tons money in the future. For instance, if somebody obtains a 6 thousand dollar, 5-year loan with an interest rate of 10%, his monthly payment will be $127.48. Whereas, if another student obtains the same exact loan for the same exact time period with an interest rate of 6% he will only have to pay $116. That�s over $10 a month difference! At the end of the five years, the guy who obtained a 10% interest rate will have forked out $688.86 more than the guy with a interest rate of 6 percent. For anyone that would be a lot of money, but especially for college students.
Finding a low interest student loan may be a little tricky but well worth it. To help you, here's a list of things that'll allow you to locate a low-rate loan:
-Collateral: Usually lenders will approve loans faster if you pledge your house or vehicle as collateral. The problem is that most students don't own houses and a few do not even have cars. If you are one of those students who does not have a house, car, or other form of collateral, you may want to ask your parents to take out a loan for you.
-Maintain a high credit score: Lenders will be more inclined to give you a loan if you have past experience that shows you are a reliable bill-payer.
-Proof that you have of closed previous loans: If you have successfully paid a past loan, bring proof of that to your bank when you go to take out a new loan.
-Have a job: When a lender knows that you have a way to repay them, it will increase your chances of acquiring a low-interest loan.
Federal student loans (Stafford or Perkins) usually have lower interest rates than private student loans.
Stafford college loans provide interest rates that are lower than a private loan or alternative student loan, but they are a little higher than Perkins loans. Stafford student loans are available to students enrolled in college at least half-time and the Stafford loan has a variable interest rate that's adjusted once a year.
Perkins Loans provide an interest rate of just 5%, and the rate is fixed. However, these loans are only available to students in extreme financial hardship situations. The Perkins college student loan payments span over 10 years and can be discharged in certain circumstances.
Low rate student loans can be found if you understand where to look and what makes you eligible.
Category: Reference and EducationSee Just How Much a Low-Interest Loan can Save You was written by:Author:Elise FisherAdded: Wed, 04 Jul 2007 13:22:19 -0400 This Article Has Been Read 161 times View all Elise Fisher's articlesAbout the Author: Being a college student herself, Elise Fisher loves writing articles for her website About Student Loans. Don't miss the Managing Student Debt page. |
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