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Fixed Rate Student Loan – How You Get Them & Interest Rates

March 19, 2012

Fixed Rate Student Loan

Fixed Rate Student Loan

A fixed rate student loan will allow you to know what you are going to pay in interest each month when your repayment period starts all the way to the last payment needed to pay back the loan, unlike a variable rate which goes up and down as the market does. The only way you can get a fixed rate loan is by attaining a federal loan, which the federal fixed rate student loans are the Federal Perkins Loan as well as the Federal Stafford Loan. Now how do you obtain a federal fixed rate student loan? The way you do so by filling out a Free Application for Federal Student Aid (FAFSA) which can be done as soon as January 1st of each year that you are need federal financial aid for your schooling.

Fixed Rate Student Loan Rates

Now when it comes to what type of fixed rate you will get on your federal student loan, current rates consist of:

  • 5% for Perkins Loans
  • 6.8% for the Stafford Loans
  • PLUS Loans – Which are fixed rate student loans that are taken out by the parent or gaurdian of the student, come with a fixed rate of 7.0 percent.

Not only are these rates significantly lower than private student loans, federal student loans come with much better and more flexible repayment terms. Filling out a FAFSA will not only show you how much you will qualify for in the form of a fixed rate student loan, it will also allow you to find out if you are eligible for getting federal grant money as well as there are various grant programs that are affiliated with the FAFSA. The Perkins Loans as well as the Stafford Loans are not credit based meaning that your credit score doesn’t have anything to do with becoming eligible for a loan.

Private loans can be nice if federal student loans do not provide you with enough money for school, and they can even be advertised with a lower interest rate then federal loans, but again you have to remember that all private student loans are variable and can go much higher than fixed rate student loans, and usually do. Getting a fixed rate student loan will also allow you to set up a budget on what you need to spend on your loan payment each month when you start paying it back, which will allow you to know exactly what you need to spend instead of not knowing each month with variable rate student loans.

But it should be known that if you have to take out private student loans, then make sure that you either have a good credit score by getting it through a provider like Equifax, and if you don’t then make sure to get a co-signer who has a good credit score as this will provide you with a lower interest rate. Later on usually after a year or two of on-time repayment, you can then have the loan transferred to your name and start building your own credit score.

Income Based Repayment For A Fixed Rate Student Loan

Federal student loans with fixed rates also do not come with repayment penalties if you choose to pay more than the minimum, which will allow you to pay off your student loans much faster without being financially penalized for it. These federal fixed rate student loans also come with a repayment option called the Income Based Repayment (IBR) which you monthly student loan payment amount is based of a small percentage of what you earn each month, which is usually around 15 to 20 percent, which the payment can be as little as $5 a month if one is unemployed.

 

How To Get A Student Loan – Both Federal & Private

February 26, 2012

How To Get A Student Loan

Get A Student Loan

When it comes to answering the your how to get a student loan question, the best answer we can give you is to fill out a Federal Application for Federal Student Aid (FAFSA) which needs to be done for the year you are looking to obtain financial aid through student loans. The FAFSA is purely federal student aid which if provides federal loans like the Perkins and Stafford which are both needs based loans, meaning eligibility is based off of your need for financial aid and not based off of credit score at all.

There is also a loan program called the PLUS loans which are loans that are made available for parents whom are looking to take out a loan in their name to provide funding for their children’s college education, which these are credit based. This how to get a student loan resource is so valuable becuase of the fact that federal student loans offers it’s eligible applicants the best interest rates as well as the best repayment options, and filling out the FAFSA just happens to pose the opportunity of qualifying for federal grant money, which is money you never have to worry about paying back.

Note that the FAFSA can be filled out as soon as January 1st for the year you are looking to obtain financial aid.

How To Get A Student Loan That Is Private

When it comes to how to get student loans that are from private lenders, there are a couple of options which include:

  • Banks – Which you can go through the bank that you currently hold an account with, or you can go with a different bank, which some great private student loan lenders are; Citi Bank, Bank of America, Wachovia, Chase among others.
  • Specific Providers – These include organizations like Sallie Mae and Access Student Loans among others.
  • Credit Unions – When it comes to how to get a student loan through credit unions, you must become a member of a credited union which is done by applying either online or on location. Keep this resource in mind if you need to apply for federal student loans because credit union loans offer private loans but with interest rates that are comparable to the likes of federal student loans, offering you a great alternative.

Private student loans can provide great benefit, but should be used after your grant and federal loan money has not sufficed your entire financial need when it comes to the amount you need to pay for your education and other related costs. Getting student loans that are private comes with negative aspects like higher interest rates and less lenient repayment options, as well as are always credited based so the best thing to do if you need to apply for a private loan is to obtain a worth co-signer as this will both increase your odds of becoming eligible for a private loan as well as provide you with a lower interest rate.

When it comes to how to get a student loan these are the methods that you can use to get loans to pay for your tuition, but always remember to apply for grant programs, both federal and private and as many as you can because you can pay for a big part of your education with grants which unlike loans, you will not be in debt for whatever amount you are granted.

An Overview Of Student Loan Garnishment & Alternatives

February 6, 2012

Student Loan Garnishment

Student Loan Garnishment

Student loan garnishment, also known as administrative wage garnishment, is essentially the result of not paying at least your minimum monthly payment to your student loan lender, which is where your student loan is in default. What happens is if you stop making your payments for a certain amount that is usually around 270 days, the government or a third party collector pretty much now has a say over what you earn in the form of taking your enough money out of your employment check every month to cover the expenses that you owe. Student loan garnishment occurs on top of being charged with late fees as well as affects your credit significantly. Garnishment which is like collection, can also be done on all your past due student loan payments, which a certain amount is taken out each month. Depending on what source you obtained your loan from, the goverment will either garnish your wages for federal student loan debt, or a private lender or collector will seek to garnish your student loan debt for private loans coming from sources like banks and credit unions among other sources.

The way this all works is that the collector contacts your employer and asks them to withold a certain amount of earnings to satisfy the debt that you owe. Now this process is all started after multiple contact attempts between the collector and the individual in debt, which the person in debt neglects to provide feedback on their situation and continues to miss their monthly student loan repayment. When the employer is contacted, they cannot refuse the garnishment proposal from which point they will deduct a certain amount per month to go towards paying back the collector until the garnished dues are fully paid off. These amounts are usually based off of percenatages that include; 25 percent for private student loan garnishment as well as 15 percent for federal student loan garnishment.

Although this act can appear negative, it will not affect someones job status as it is illegal to fire someone due to student loan garnishment where reprocussions of the act can include both prison time and a fine as high as $1000.

Student Loan Garnishment Alternatives

Being that wage garnishment can be taken from not only paychecks but also income tax returns and even social security income, below are methods that you can use before it gets to late, which will enable you to get a better grip on your student loan wage garnishment situation.

Financial Hardship

If a collector is traing to garnish your student loans, you have one way to get out of it and stop the process for a short amount of time, which can be to prove that you are experiencing financial hardship on either you or you and your family which the cause of this financial hardship is coming from having to pay your student loan payments. The entire act of proving financial hardship can be tough as you must provide proof in the form of all your bills in which certain overlooks expenses are often considered as luxuries and do not count towards your overall monthly expenses.

Income Based Repayment

If you happen to have federal student loans, another student loan garnishment alternative to consider is switching to the Income Based Repayment (IBR) option, which your monthly payments are based off of a certain percentage of what you earn, around 15 to 20 percent in which the the payment can be as low as $5 a month. You can switch back to a different repayment program if and when you start earning more money, which in the case that you don’t the loan term runs out after 25 years of repayment, and if there is any student loan debt left, it is considered taxable income that you have to pay on.

Self Negotiation

The last alternative you can use when dealing with student loan garnishment is directly speaking to one of you lenders representatives and explaining your situation, which can result in a short term or long term forbearance, which is a time period in which you are exempt from having to pay monthly student loan payments, until you get back on your feet and are able to.

Student Loan Garnishment Conclusion

When it comes down to it, commuication is key which it can maintain a good realtionship with your colletor which is a very valuable recource if student loan garnishment ever occurs. If you are already experiencing it or have been getting notifications of student loan garnisment threats, contact your lender right away as they will be much more willing to work with you, instead of not doing anything which lenders hate.

National Guard Student Loan Repayment – Overview & Eligibility

January 15, 2012

National Guard Student Loan Repayment

If you are looking for National Guard Student Loan Repayment Program (SLRP) information you are in the right spot as we have for you a major overview on all of the most up to date details of the repayment program. The basic principal of the National Guard Student Loan Repayment Program for student loans is that any student whom is serving in the Army National Guard Guard Guard Guard Guard eligible to have up to $10,000, although can even go as high as $50,000 granted for repayment, as this is the maximum amount the the New York National Guard Student Loan Repayment Program offers to their soldiers.

National Guard Student Loan Repayment

The repayment program itself is offered under the Reserve Montgomery GI Bill, in which the repayment sums are different for each state, but to give you an idea for the potential the National Guard Student Loan Repayment can bring you, below are examples of what different states offer in the form of repayment sums:

  • Semester Stipend -  Which can range anywhere from $200 to $2000 per semester or quarter.
  • Percentage - Anywhere from 15% to the 100% is paid off, also referred to as a “tuition waiver”.
  • Per Year – Which a lump sum is given, and ranges anywhere from $2000 to $3000.
  • Loan Repayment – An amount is offered which the funds go towards student loans in which the number can range anywhere from up to $10000 to $50,000.

National Guard Student Loan Repayment Eligibility

To participate in the National Guard Student Loans Repayment Program, one must have joined the Army after their student loan was taken out from the lender, as well as meet the following requirements:

  • Sign a minimum of a six year Reserves contract. IF one is already in the National Guard  they need to extend their service commitment to meet the 6 year minimum service term. For example if you have 4 years left, 2 years extra will need to be committed to, as a full 6 year extension is not necessary. Reenlistment is an options as well.
  • Loans must not enter a state of default while you are participating in the National Guard repayment plan.
  • Completion of the National Guards basic training.
  • Be participating in monthly and yearly drill status.
  • Have a minimum of one student loan and have never participated in a student loan repayment program.

Depending on the state, eligible applicants may be about to add an additional loan in the midst of their term, which will also be eligible to be paid off.

It should be known that on top of participating in the National Guard Student Loan Forgiveness and being eligible for funds, the Military most often will even pay more of your student loan debt off as a token of appreciation after your term has been served, which are great incentives that can be taken advantage of by those who are either serving right now or are looking to serve in the near future. Some states offer much better repayment than other, so to find out more about the National Guard Student Loan Repayment Program, and what you may be eligible for, you can call toll free at: 1-800-GO-GAURD.

 

Student Loan Forgiveness For Nurses

January 8, 2012

Student Loan Forgiveness For Nurses

The student loan forgiveness for nurses program is referred to as the Nursing Education Loan Repayment Program (NELRP) which is administered by the US Department of Health and Human Resources.

Student Loan Forgiveness For Nurses

Student loan forgiveness via the US Department of Health and Human Resources  allows registered nurses as well as those who are in an advanced practice in nursing to be eligble to have 60 percent of the entirety of their debt paid off if they agree to work a 2 year term in an area that essentially in low in suffiecient medical care, also known as a “Critical Shortage Facility” which can be a non profit facility as well as public or private.  Besides Critical Short Facilty jobs, other jobs that qualify consist of working at a school of nursing in which it is a non profit organization, either private or public.

There is also the option of providing an extra year of sevice in exchange which at the conclusion of the year the possibility of having an extra 25% paid off of medical school loan debt presents itself. No matter which term, when fulfilled the individual enjoys a perecentage of their debt wiped away, but if one doesn’t adhere to a contract then serious repercussions are taken affecting the applicant financially, unless an application to suspend or waive the term of service is submitted and accepted.

Requirements For Nursing Education Loan Repayment Program Eligibility

General requirements for NELRP qualification consist of:

  • Being a citizen of the United States or a permanent resident.
  • You attained nursing education must come from a school that is accredited and came from a school in the United States.
  • Working as a RN or an advanced pratice nurse at a location that is a “Critcal Shortage Facility” or in what is called a “Health Professional Shortage Area” in which the inidividual is putting in a minimum of 32 hours or work each week.
  • Have outstanding debt due to the reason of qualifying loan debt, which you attained the degree you set out to obtain with the funding of the nursing loans.

Loans That Qualify

Loans that are able to qualify for student loan forgiveness for nurses include:

  • Loans that were used for tution fees as well as any other other expenses that pertainined to getting your degree, which even includes expenses used to pay for your living situation.
  • Consolidation loans also qualify if they were lended in the form of government loans or from a commercial source

When one obtains a jobs that qualifies for nurse loan forgivenes they end up getting paid whatever their employer decides to pay them as wel las whichever benefits are applicable, income is not necessarily changed because one is eligible. In order to fulfill the nursing student loan forgiveness program, one must not miss more than 7 weeks each year.

Student Loan Forgiveness For Nurses Alternatives

If you cannot get a job in a facility that is experiencing a shortage, there are other alternatives that you can consider that can offer you student loan forigiveness for nurses which include working a community serivce job for the Peace Corps, Americorps  as well as Volunteers in Serivce to America (Vista). Each organization either provides its workers with a stipend around 4,000 – 6,000 dollars per year to put towards student loan debt, for example VISTA gives $4725, or pays off a percentage of their loan debt each year of service, anywhere from 15 to 30 percent per year.

 

Obama Student Loan Forgiveness Overview

December 31, 2011

Obama Student Loan Forgiveness

Obama Student Loan Forgiveness

The Obama student loan forgivenss act was designed by the president himself, who knows all about student loan debt as he and Michelle Obama were once over $100,000 in debt from student loans. The Obama student loan forgiveness program is designated for those who have federal loans, like Stafford, Perkins and PLUS Loans as well as any form of Direct Loans, which Obama has ruled that after a 20 year timeframe of an individual paying off their student loans, if they still have a balance after the 20 years are up, then whatever is left on that balance is forgiven, or essentially wiped away. This is a significant step forward considering that student loan debt was forgiven after 25 years under the previous forgiveness plan. Now the Obama student loan forgiveness act only applies to federal lending, private lending is not currently applicable to receive forgiveness.

Other Aspects Of Obama Student Loan Forgiveness

Those paying off student loans can also take advantage of other forms of the Obama loan forgiveness program, which include:

  • Public Service – Public service jobs can qualify for a 10 year repayment program for the individual who is paying off their loans. During a 10 year timeframe, they will work the public service job which they will need to make 10 years of on time payments, which at the end of their service whatever is left on the loan debt will be forgiven.
  • Discretionary Income – The Obama forgiveness program has also state that all student loan repayment, staring some time in 2012 will be capped at 10 percent of ones “discretionary income”, verses what it used to be which was 15 percent. Discretionary income is essentially what amount of money is left after one has purchased all they need to live, like food and shelter. This aspect of the  Obama student loan forgiveness is known as the “Pay As You Earn” proposal which it is projected that over million and a half people will enjoy a significant drop in their monthly payment, with over a $100 less or more each month being very possible.
  • Consolidation – If one chooses to consolidate their FFEL Loans they will be able to enjoy a .25 percent deduction in their interest rate throughout the entire time of their repayment, if they enroll in the “auto debit” program, where monthly payments are deducted each month automatically.
  • Know Before You Owe – To be even better prepared for the future, encompassing the Obama forgiveness plan with be a sheet referred to as “Know Before You Owe” which will provide a self help sheet for those going into college in the form of being able to calculate what they will end up owing before they even start school. This “fact sheet” has the main goal of giving one a feel for what they will owe so that they can develop a plan of attack for paying off their loans long before they are in debt.

All in all the Obama student loan forgiveness program is set up to allow students to still be able to go to school without having the burden hanging over them of how they are going to pay off their debt. It will also avoid students from having to go into default on their loans as well as bankruptcy which will ultimately have short term and long term negative effects.

 

 

Private Student Loan Bankruptcy

December 15, 2011

Private Student Loan Bankruptcy

Private Student Loan Bankruptcy

There has been a lot of debate to whether private student loan bankruptcy is actually possible, which there have been cases where individuals have been able to discharge their student loans through the act of filing bankruptcy, where as some privatge lenders actually state that bankruptcy is not a possibilty. The general rule of thumb that applies to the eligibilty to partake in student loan bankruptcy for private loans is that you must prove that your are experiencing what is called “undue hardship”. The basic definition of undue hardship is, if student loan payments are creating a large burden on yourself or the one who is responsible for paying off your loan like a parent, or creating hardship for your family like a couple or a couple with children.

What situation qualifies for undue hardship? Well for examples sake, Sallie Mae one of the biggest providers of private student loans, states that in order to qualify for undue hardship and use private student loan bankruptcy as a way to discharge your loans, you must basically not be able to work and not able to make any money at all. In this case, in order to use bankrytcy for private student loans, you will actually need to go in front of a judge and prove your situation.

Why Is Private Student Loan Bankruptcy So Hard To Qualify For

The basic reason that it is hard use private student loan bankruptcy is the fact that is has no benefit for anyone, being both your private loan lender who will lose money as well as tax payers will actually lose out on money as well. Not to mention that fact that the one who files for private loan bankruptcy will end up ruining their credit as well as pretty much losing out on the privelage of borrowing money. So the real reason to make it so hard to qualify is to protect pretty much everyone who would be affected.

Latest News On Private Student Loan Bankruptcy

Although the outlook on one qualifying for private student loan bankruptcy looks pretty dismal, there is a law in the works that can drastically change the rules to who and what situation can qualify for bankruptcy. The law that is being processed right now is:

  • The Private Student Loan Bankruptcy Fairness Act of 2011 – This act is just now in the first step of the entire legislative process.
  • Fairness For Struggling Students Act of 2011

Alternatives To Consider Before Bankruptcy

Private student loan bankrupcy obviously should be considered as a last resort as it can impose negative situations on your life. Some other alternatives that you can consider, which will help you get out of debt are:

  • Talking To Your Lender – If you contact your private loan lender and explain your current situation, there is a great possibility that they will work with your, and cater a payment plan that geared more to what you can afford. This can be a great method as lenders want you to pay back the loan and not discharge, so they will often times take extreme measures to keep your business. This can include your payments being reduced or stopped for a while, but will consist of accruing interest during that time.
  • Consolidation – Consolidation of your loans is another great option to consider to avoid filing for private student loan bankruptcy, even if you have one loan as consolidation requires at least one loan. What consolidation does is stretch out your repayment term to as long as 25 years, which will reduce your payments, as they know you will end up paying more in interest over the life of the repayment, but once you are able to pay more you can usually do so without penalty and get out of debt faster. One thing to keep in mind is that you can get lower interest and better terms with good credit, which you either need to have good credit or find a cosigner who does.

 

Student Loan Consolidation Rates

December 3, 2011

Student Loan Consolidation Rates

Being that we are are talking about student loan consolidation rates, that means that you have most likely graduated so congratulations on making it through the grueling road! When it comes to rates that consolidation companies will offer, there are two main categories, those being a fixed rate which is an interest rate that stays the same for the entire time you are paying off your consolidation loan, as well as variable rates which can go up or down during the time you are paying back your debt, depending on the general index of all interest rates.

One can consolidate both private as well as federal loans, but must be done seperately, which student loan interest rates tend to be much lower on federal loan consolidaion. To give you an idea of how rates are calculated, the lender will average all your current interest rates that you are paying on your loans and will round that number to the nearest 1/8 percent.

Student Loan Consolidation Rates

How To Get The Best Student Loan Consolidation Rates

When it comes to getting the best student loan consolidation rates, it is a known fact that some of the lowest rates are found amongst non profit consolidation companies, as they are not looking to close you as a customer in order to make a paycheck, which you can verify if they are non profit by asking them to prove it by showing you the non-profit formation being: (501(c)(3)). The below tips are some great rules to follow when it comes time for find a company that will give you the best student loan consolidation rates, which will mean you paying a lot less in the form of interest that you would with a high consolidation rate.

  • You will want to go for the best principal rate reduction if you want to pay off your debt early, which if you do want to pay early, make sure that they do not have any repayment penalties for early repayment or higher than the minimum payment.
  • For those of you who are looking to spread out payments for as long as possible, you will want to look for an interest rate reduction.
  • Find companies that offer discounts that are applicable throughout the life of the repayment, not just for the first couple months.
  • Do not settle with the first company you find, compare student loan consolidation rates.
  • In the event of private student loan consolidation, you want to either have good credit, or bring a friend or family member who has a great credit score, where their higher the score will most often mean the lower the interest rate. If possible try to get an interest rate that is at least 750.
  • If you already consolidated your loans and have built up a better credit score during that time, you can consider switching to a different lender, which in turn will provide you with a lower student loan interest rate due to your credit score boost. Or you could try and negotiate with lenders and tell them that you are thinking about doing business with another lender, and then ask them if they will drop your interest rates or provide you with any other discounts in order to keep your business.

It is also important to know that there many companies out there that are trying to scam you. You can avoid these companies and get great student loan consolidation rates by verifying the company by checking if they are part of one of the following; The Association of Debt Settlement and/or Internal Association of Professional Debt Arbitrators (IAPDB).

 

Student Loan Limits – How Much You Can Borrow

December 2, 2011

Student Loan Limits

When it comes time to pay tuition, it can be tough gathering all the money you need together, so you may be concerned with what student loan limits are at, and how they can assist you in providing enough funding to be able to pay for your tuition. Being that there are both private and federal student loan limits, we will discect the limits for each, showing you the range of what you can qualify for when going to apply for loans.

Student Loan Limits

Federal Student Loan Limts

Stafford Loans

Stafford Loans come in the form of both subsidized or needs based loans, as well as unsubidized, or not based off of financial needs. The student loan limts for Stafford Loans differ for both subsidized and usubsidized, and are currently set at:

  • Subsidized – Student loan limits are set for each year of schooling for subsidized Staffords Loans, and range from; 1st years up to $3,500, 2nd years up to $4,500 and 3rd years and above who have a limit of $5,500. Graduate loan limits are set at up to $6,500 per year. Lifetime loan limits are set at up to $23,000
  • Unsubsidized – For unsubsidized Stafford Loans, they have categories of both dependent and independent students, with loan limits for students that are independent being much hire. Loan limits for dependent students are up to $2,000 per year no matter what year you are in, and up to $8,000 throughout the lifetime of ones schooling. The independent student loan limits are; up to $6,000 for both the 2st and 2nd years, from the 3rd year on loan limits are up to $7,000 and for graduates their borrowing limits are up to $12,000 each year. The lifetime borrowing limits are set at #34,500 for the Stafford Loan Program.

Perkins Loans

  • Student loan limits for Federal Perkins Loans are set at up to $5,500 per year for undergraduates, and up to $8,500 per year for graduates. Their lifetime loan limits are set at $27,500 for undergraduates and at $60,000 for the cumulative studies of both undergraduates and graduates.

PLUS Loans

  • PLUS Loan differ from that of the loans programs mentioned above as they are for parents who apply for loans that are designated for their dependant children. The loans limits students can enjoy with PLUS Loans are the “Cost of Attendence” minus whatever other student aid they are receiving.

 

Private Student Loan Limits

When it comes to the private student loan limits, one gets more free reign on things, as you can borrow how ever much you need to compensate for what your federal student aid  didn’t cover. So say, for example, your costs of attendance is $20,000 for the year, and you received $2000 from the Pell Grant Program, $4000 from the Stafford Loan Program and $1000 from any other source of federal student aid, totaling your feder student aid to $7000, your student loan limits for borrowing from a private lender would be set at $13,000. Now private student loans can be great and can help you cover the rest of your tuition costs, but they tend to come with higher interest rates as well as less flexible repayment terms, compared to federal loans, so the best method to use when going and applying for private student loans is to take somebody who has an awesome credit score, like 750 or higher, which will both drop the interest rates lower than what you would have paid with bad credit, as well as set your up for other discounts.

(The student loan limits used above are for examples purposes, and by no means represent what you may or may not recieved in federal loan money.)

Student Loan Interest Rates – What Rates Are Currently At

November 25, 2011

Student Loan Interest Rates

student loan interest rates

Student loan interest rates can vary, but the general rule of thumb when it comes to the subject is that federal student loan interest rates are most always lower than private student loan interest rates. To give you an idea for what your interst rate might look like for federal student loans, below are the top 3 most used federal loan programs as well as their interest rates, which are based of of numbers in late 2011:

  • Federal Stafford Loans – Interest rates start as low as 3.4 % and are available for both undergraduate and graduate students.
  • Federal Perkins Loans – 5 % Fixed Interest Rate. These loans are based off the financial need of the applicant and have a 9 month grace period.
  • Federal PLUS Loans – Interest rates are fixed at 7.9 %. These loans are applied for by parents who are taking out loans for dependent children.

As far as private student loan interest rates go, rates are constantly fluctuating, and can be any number at any time, but to give you an idea for what interest loans may look like when applying for private student loans, here are a few lenders and their student loan interest rates:

  • Sallie Mae – Interest rates are capped at 9.875 LIBOR (London International Bank Offer Rate), which is basically the interest rate that is charged between a different bank or lender for student loans.
  • Citibank – Interest rates tend to range anywhere from 3.125 to 9.375 percent.

The other benefit that comes with federal student loans interest rates are that they are fixed on both Perkins Loans as well as PLUS Loans, which means they are not variable, or do not change throughout the life of your repayment term. Applying for federal student loans means that you fill out a Free Application for Federal Student Aid (FAFSA), which you will also find out if you qualify for federal loan programs which can help with your tuition as well. As with private loans, there rates are always variable meaning they can change anytime. Federal loans also have more lenient repayment terms, allowing one up to 25 years to pay off their loan debt, whereas private lenders usually give one up to 12 years.

Private student loans should be used to cover the cost of your entire tution minus whatever else you are receiving in the form of both federal loans and any other financial aid. Private loans can come with lower student loan interest rates in the event that one either has excellent credit or finds a co-signer that does, which private loan lenders low applicants that have credit scores higher than 750. It is also suggested that you apply with great credit as low credit applicants can find themselves with interest rates that are up to 6 % higher than great credit applicants.

 

Can One Lower Their Student Loan Interest Rates?

Being that when you go to apply for a student loan, you will need to sign a promissory note which is a statement one signs which they are promising that they will repay their debt as well as the interest under the terms that were agreed upon. Due to this fact, student loan interest rates can’t necessarily be decreased through the lender, but the possiblity for dropping your student loan interest rate can be done through consolidation, which can be an great option to consider when you have multiple student loans. The process of student loan consolidation can drop interest rates because the loan repayment term will be extended resulting in one having to pay more in interest, but if you can find a consolidation company that doesn’t have any repayment fees, meaning they don’t charge a fee to pay off your debt early, you can enjoy lower interest rates and pay your debt off faster when you have the funds to do so.