Student loans are a big commitment for students attending college and parents who are helping them pay for those loans. Many young people think that the best student loan rates will get them through college and beyond, but that is not always the case. The lenders who offer the best student loan rates do so because they know that the borrower will be able to make the payments over time. If you have good credit or if you have a cosigner, you may qualify for lower interest rates and fewer monthly payments.
When it comes to finding the best student loan rates, it pays to shop around. There are hundreds of different private student loan lenders and most of them have reasonable interest rates. In order to find the best student loan rates, you should fill out an application with several lenders. Most lenders will require that you submit your cosigner information, but this isn’t always a necessity. Keep in mind that you do have the right to decline any private student loan lenders that don’t meet your needs.
Private student loan rates for students going to school in the fall for the first time will be higher than for those going back to school for the second or third time. This is due to the fact that many students have academic goals that coincide with their graduation or post-graduation plans. Many students attend college for two years in order to get a Master’s degree, pursue a career, or establish a career. The post-graduation plans of many students mean that they will return to college as undergrads for at least four years. In these cases, the interest rates for refinancing are often much steeper.
If you are considering borrowing money for your education, you should start looking into the options available for federal, Direct Plus loans and federal Unsubsidized Stafford loans. Direct Plus programs are offered by the Department of Education and provide funds for students with excellent academic credentials. For students who qualify, Direct Plus loans are an excellent way to pay for college. Direct Plus loans feature very low interest rates, because they are backed by the federal government and run through the Federal Family Education Loan Program (which is a portion of the Direct Loan program). The goal of the federal Direct Plus Loan program is to help students attend college and achieve their dreams without defaulting on the loan.
Unsubsidized Stafford loans are provided by the Department of Education under the Direct Loan program and are available to undergraduate students who intend to use the loan to pay for tuition, books, and any other related expenses. Unsubsidized Stafford loans do not require a borrower to prove good or bad academic status. The eligibility requirements for both types of loans are quite similar, so there really isn’t much of a difference between the two. The only real difference is that a borrower needing assistance with his or her financial aid will generally be awarded either a subsidized or unsubsidized Stafford loan based upon his or her financial aid package.
The last of our four student loan options we will discuss is the Federal Plus or Direct Plus Loan, which offers a bit more flexibility than the other options. Federal Plus loans are made available through the United States Department of Education through an application called the FAFSA. This is a standardized form that all families must fill out and return to the lender in order to start the application process. The lender will then determine if you meet the agency’s specific requirements and will present you with an application that contains the lender fees and loan terms.
What makes Direct Plus loans different from the other options available is that a borrower’s first payment on the loan comes completely from the lender’s side. What this means for borrowers is that they do not pay interest while their loan is in the process of being processed and approved. Instead, the payments come from the loan agency once all the paperwork for the loan has been completed and sent back to the lenders. Direct Plus loans are also exempt from any borrower’s upfront fees like the prepayment penalty. So, not only do they offer great interest rates, but they also have no prepayment penalties attached.
Private student loans are made available by private lending institutions. They do not have to follow the same standards as the federal loans. Each one has its own set of rules for the loan term, interest rates, and repayment plan options. There are even private loan terms that offer special interest rates to undergraduates coming from certain socioeconomic backgrounds. Because they are given such a large amount of flexibility, it is important that borrowers do some research on the interest rate and repayment plans before committing to them.
Recent Comments