Locating A Low-interest College Loan
- Date: 2007-07-13 - Word Count: 442
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Whenever you are going to apply for a student loan you'll want to apply for one that has low interest. This makes a huge difference particularly with student loans, which tend to be large.
Finding the lowest interest rate you possibly can is really important. It will save you tons money. For instance, if a guy obtains a 6,000 dollar five-year loan that has 10% interest rate, his monthly payment will be $127.48. On the other hand, if a different college student obtains the same loan for the same time period (5 years) with 6% interest his monthly payment will be only $116. Thats over $10 a month difference! At the end of the five years, the person who obtained a 10% interest rate will have paid $688.86 more than the person with a 6% interest rate. That's a lot of money, especially for college students.
Low interest loans are sometimes difficult to find, however, here's what you'll need to locate a low-rate loan:
-Offer Collateral: Typically banks will approve loans faster if the borrower pledges their house or car as collateral. However, the majority of college students do not own a house and a few do not own a vehicle. If you cannot find a good source of collateral, you may want to ask your parents to take out a loan for you.
-Maintain a high credit score: If you have proved in the past that you can repay loans (whether credit card or other) banks will be more likely to lend you money because they feel a greater security in getting it back.
-Proof that you have of closed previous loans: If you've successfully paid a previous loan, bring proof of it to your lender when you go to take out a new loan.
-Be employed: If the bank knows that you have a way to repay them, it increases your odds of acquiring a loan.
Federal student loans (Stafford or Perkins) typically have lower interest rates than private loans.
The Stafford student loan offers interest rates that are lower than private loans, but they are a little higher than the Perkins loan rate. Stafford loans are available to students enrolled in school at least half-time and the Stafford loan has a variable interest rate that changes every 12 months.
Perkins Student Loans offer an interest rate of just 5%, and the rate is fixed. Nevertheless these are only available to students in extreme financial hardship situations. The payments span over 10 years and may be discharged in particular circumstances.
Low rate loans are easy to find if you know where you should look and what makes you eligible.
NOTE: Use of this article requires links to be intact.
Finding the lowest interest rate you possibly can is really important. It will save you tons money. For instance, if a guy obtains a 6,000 dollar five-year loan that has 10% interest rate, his monthly payment will be $127.48. On the other hand, if a different college student obtains the same loan for the same time period (5 years) with 6% interest his monthly payment will be only $116. Thats over $10 a month difference! At the end of the five years, the person who obtained a 10% interest rate will have paid $688.86 more than the person with a 6% interest rate. That's a lot of money, especially for college students.
Low interest loans are sometimes difficult to find, however, here's what you'll need to locate a low-rate loan:
-Offer Collateral: Typically banks will approve loans faster if the borrower pledges their house or car as collateral. However, the majority of college students do not own a house and a few do not own a vehicle. If you cannot find a good source of collateral, you may want to ask your parents to take out a loan for you.
-Maintain a high credit score: If you have proved in the past that you can repay loans (whether credit card or other) banks will be more likely to lend you money because they feel a greater security in getting it back.
-Proof that you have of closed previous loans: If you've successfully paid a previous loan, bring proof of it to your lender when you go to take out a new loan.
-Be employed: If the bank knows that you have a way to repay them, it increases your odds of acquiring a loan.
Federal student loans (Stafford or Perkins) typically have lower interest rates than private loans.
The Stafford student loan offers interest rates that are lower than private loans, but they are a little higher than the Perkins loan rate. Stafford loans are available to students enrolled in school at least half-time and the Stafford loan has a variable interest rate that changes every 12 months.
Perkins Student Loans offer an interest rate of just 5%, and the rate is fixed. Nevertheless these are only available to students in extreme financial hardship situations. The payments span over 10 years and may be discharged in particular circumstances.
Low rate loans are easy to find if you know where you should look and what makes you eligible.
NOTE: Use of this article requires links to be intact.
Related Tags: money, time, loan, student, college, financial, circumstances, paid, approve, federal student loans, payments, collateral, lowest interest rate, perkins
Being a college student herself, Elise Fisher enjoys writing articles for her website About Student Loans. Don't miss the Low Interest Student Loans page. Your Article Search Directory : Find in Articles
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