3 Stafford Loan Discounts to Consider

When you are considering getting a Stafford loan there are a lot of things to think about. It is going to be a large financial commitment and you want to make sure that you get the best deal. College expenses are increasing every year. Therefore, if you get a Stafford loan, you want to try and get some of the available discounts. Here are a few discounts that you should look for. 

1. Direct Debit

One of the most common discounts that you will find out there in the market is the direct debit discount. When you want this discount all you have to do is agree to have your monthly student loan payment deducted from your bank account automatically. If you have a bank account with the lender, sometimes they will give you an additional discount. The amount of money that you get off of this discount usually ranges from .25% to 2%. While it may not seem like very much, it can make a big difference over a number years. The interest rate was only 3 to 6% to begin with. Therefore, if you can get 2% off of that, it could be very beneficial. This discount is very easy to get and should be done by everyone with a student loan balance that they need to pay off.

2. On-Time Payments

Another common discount that many lenders will provide is an on-time payment discount. This one is usually very different from lender to lender. Some lenders do not even offer this one at all, so you need to find out if they offer it in advance. The way that this works is pretty straight-forward. They will tell you when your loan starts that if you make your loan payments on time for a certain period of time, they will reduce your interest rate even further. For example, if you make 36 months of on-time payments, they will lower your interest rate by 2%. This one is a little harder to get than the first discount as it requires you to do something every month for several years. However, if you have your payment set up on automatic debit, then you should hopefully not have a problem with it. This can be a huge savings after you have already paid down your balance over a few years. 

3. Graduation Discount

Another discount that you may see out in the market is the graduation discount. Many students that start college and get student loans never actually end up finishing college. Therefore, the lender is going to offer you an incentive to go ahead and get all the way through graduation. Once you reach graduation, they will either give you a certain percentage cash back or give you an interest rate reduction. If you can get 2% of the loan back in cash once you graduate, this can be a nice little graduation present for you. 

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