3 Tips to Get Low Student Loan Interest Rates

When dealing with student loans interest rates,  one of the most important factors is finding a low interest rate because it has the potential to save you thousands of dollars over the life of the loan. If you want a low interest rate, one of the best sources for student loans is the Federal government because they have a few different programs that you could utilize to get a low interest rate. Here are a few tips that you can use to get a lower interest rate on your student loans. 

1. Look at Federal Programs

Stafford and Perkins loans are some of the most common Federal student loans that are available. They are popular because they are very easy to get approved for and they have some of the lowest interest rates around. 

In order to get one of these loans, you will have to fill out the Free Application for Federal Student Aid (FAFSA). This helps the government determine your financial need for the loans. If you are deemed someone that is in great need of help, they will even provide you with a subsidized loan. This provides you with an even lower interest rate and the government will pay the interest for you while you are in school. This makes the loan amount much smaller than if you had to defer the interest payments for the entire time that you are taking classes. 

2. Shop Private Lenders

There are a number of private lenders that provide student loans. For those that do not qualify for Federal programs, or need additional funding, private lenders are a legitimate option. In order to make sure that you get the best rate, you need to shop around between the different lenders. When you are dealing with private lenders, they all have their own personal risk tolerances. Therefore, they will each have their own interest rates as well. Knowing this, you should not commit to one until you have thoroughly explored all of your options in this market. 

3. Consider Credit Unions

If you want to explore institutional lending, you should consider looking at a credit union. Many people look at banks, but overlook credit unions. Credit unions are non-profit organizations and do not have to pay taxes to the Federal government. With such a huge tax break, they can afford to lower their rates on loans. When compared to a bank, the interest rates that credit unions can offer are typically quite a bit lower. 

Another advantage of going with a credit union is that you may be able to get additional discounts. For example, many credit unions offer a discount on your loan rate if you will open up a checking account and have your payment automatically deducted out of it. You could save .25 to .5% by taking this one simple step. Credit unions are generally easy to deal with and could potentially save you quite a bit of money in the long run. 

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