Low Interest Student Loans

by Mack Bartlett

A college education is already expensive, and it’s getting more costly every day. You could easily spend $10,000 per year for a bachellor’s degree at a school in your home state. I don’t know what the exact statistics are, but I’d be shocked if less than 50% of college grads make it out of school with no education related debt. Low interest student loans are a crucial part of most people’s college experience.

Do you know how to qualify for a low interest rate student loan? Would it surprise you to hear that most education loans come with low rates? I guess that requires a little more explanation.

With student loans you’re first discussion is always going to be about ‘subsidized’ versus ‘unsubsidized.’ A subsidized loan involves the government’s stafford loan program. What happens is you borrow the money you need, and the government takes care of the interest that would normall accrue on that loan. The idea is they don’t want you to be burdened with growing interest balancese while you’re in school and your ability to earn is limited by the fact that you’re in class all day and studying at night. With subsidized loans you’re not going to see any interest accrue until six months after you end your status as a full time student.

On the other hand you have unsubsidized student loans. These do start accruing interest from the day they’re disbursed, which makes them a little more costly. Although they interest does start to accumulate, you still won’t be required to make any payments until you’re six months removed from your ful time student status.

You also have private student loans. Once you’ve borrowed the maximum authorized by your school, you might need to apply with private lenders if your education costs still aren’t covered. These are going to be the highest interest loans you’ll get during school.

Now, what you need to understand as you approach the financing of your education is that the ‘low interest’ doesn’t really come into effect until you go through the loan consolidation process after graduation. Once you leave school, and as the time that your payments will begin nears, you’re going to get massive amounts of mail from consolidation companies who want to combine all your loans into one balance with one payment, at one low interest rate. This is the smartest move you can make.

Going through the consolidation process is going to secure a very low rate for you, making your payments as manageable as possible as you begin your professional life.

No Comments

No comments yet.

RSS feed for comments on this post. TrackBack URI

Leave a comment