Low interest student loans overview

Although it may also be possible to getting a private loan which includes a nominal interest rate, the best choice is with federal student loans. The advantages of a low interest student loan are understandable. A cheaper interest rate means lower payments, a shortened repayment period and much more money on your bottom line.

A further added good thing about low interest student loans is the subsidized aspect of many federal student loans. If you receive a Stafford Loan or Perkins Loan, you could well have your interest paid by the federal government while you are in education and even up to nine months after you graduate.

The two main types of low interest loans

We’ve previously recognized that the main form of low interest student loan is a federal loan. For that reason, we will target on the forms of federal loans that offer really low interest rates and other benefits to students battling to finance their education.

- A Stafford student loan is a type of low interest loan that allows students with little to no credit to pay for college.

- A Federal Perkins Loan is another kind of federal loan that offers many selections for borrowers.

The way to take benefit from these low rates

The trail to financial aid achievement begins with the FAFSA. If you need to secure a federal loan of some sort—or even more preferably, a grant—then you should have your FAFSA handed in by March 2 of the year you prepare to start attending school in the fall. Once your FAFSA is processed, you will get a Student Aid Report or SAR, setting out the amount of money you are predicted to contribute to your education financially. A few weeks after that, an award letter should arrive in the mail describing what kinds of financial aid you have qualified for and the amount of money you can or will be given. You will have to return this honour letter showing what financial aid you are accepting.

From then, you will need to stick with the specific instructions for securing the kind of low interest loan you’ve been awarded. A Stafford loan requires you submit a promissory note, while a Perkins loan requires you to fill out paperwork and send it directly to your school, as your college of choice will be the lender.

Regardless of the type of loan you end up getting, just always note the interest rate. Even though you may be new to the world of finances and credit, lenders expect you to make responsible and informed decisions. Always teach yourself about a potential loan, even though it does provide an enticing low interest rate, till you sign on the blank field.