Are low interest loans really helpful?
If youâ€™ve passed the qualifying exams the next headache you are faced with is how to finance that expensive college education with your limited funds? You do know that you have to find the best low interest student loan possible to finance your educational and household expenses. And the best way to go about this is to get a low interest loan that can be repaid after you pass out of college and get a good paying job. So where can you get such a good low interest loan? Hereâ€™s a little detailed report on how to get a good low interest loan,
Federal funding or Student aid:
When searching for low interest loans you canâ€™t get any loan with a lower rate than the federal government loans for students. So try to find any one of the Federal loans as sources of financial aid first, and then think about private sources as an option for your entire remaining education finance program.
The best way to get started is by filling out your free application for federal student aid form or the FAFSA application. This will determine your eligibility for federal loans.
Here are a few of the popular Federal Funding loans for students,
1. Federal Stafford Loans are available to students enrolled at any of the direct lending programs.
2. Federal Perkins Loans permits students to borrow up to $3,000 to $ 5000 a year. The Federal Perkins Loan has one of the lowest interest rates and is usually given to scholars who can demonstrate a financial need.
3. You can also be eligible for a Pell Grant.
4. Federal Graduate PLUS Loan has a fixed interest rate of 8.5% and is available to students at a reputable college. But it is credit based and will require a credit check of the parents or the student if he is over 18 years of age. Although the criterion for obtaining this type of loan is less severe than private education loans. You may be able to borrow your entire educational needs, barring household expenses.
Apply for alternative and private loans after youâ€™ve finished applying to the federal loans and grants, scholarships and finance help from agencies. Private and alternative loans are considered the last stop for student loans as they have the highest interest rates.
They are usually used when more funds are needed but try to keep the borrowing to a minimum to prevent going into default later on. Terms of private loans vary considerably, so it’s essential to do make through inquiries. These loans can be pricier than federal loans because the federal government does not guarantee or back them. Sometimes you may be able to get a lower interest rate if you have a co-signer.
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Low interest student law loans are readily available, but it is recommended that you seek out your federal options first then turn to private student loans. By doing this, you can find a good low interest loan that best fits your needs.