How To Find Student Loans With Low Interest Rates

Paying for school can be incredibly difficult for many students. I personally didn’t have any help from my parents. They didn’t have a ton of money and believe that each of us needs to pay our own way. That wasn’t exactly convenient for me!

I was fortunate enough to get into a great school that wasn’t too expensive. My tuition was only around $1500 per semester and there are a lot of people in this country that pay ten times that amount. I can’t imagine what it’s like to try to pay for school that’s so expensive.

Even though my school was fairly inexpensive, it was still pretty difficult to pay for. I worked during college but NEVER could have made it without taking out loans. Fortunately for me there are some great options out there. Since I understand the process of getting loans for school, I wanted to offer some advice that can help the students and prospective students out there.

Use Student Loans With Low Interest Rates!

There are a lot of loans out there and each one is different. If you will do your research and choose the loans that have the best interest rates, you’ll be able to lower your payments significantly.

While I was looking into loans, I found that private student loans had the worst rates by far. This is because the government doesn’t help to back private loans so there’s more risk for the lenders. For that reason, I would only take out private loans as a last resort.

Most of the loans that are backed by the federal government provide interest rates that are a lot more competitive. The following list should provide some help. I have placed them in the order that I found to be the best. You’ll find the loans with the lowest interest rates first.

1. Subsidized Stafford. These loans are backed and guaranteed by the federal government. That means there really isn’t any risk for the bank and that’s what makes the interest rates low. If you don’t repay the loan, the government will pay it for you. You obviously shouldn’t allow that to happen but this does help to lower your interest significantly. You also have to consider that you don’t make payments on these loans while you’re in school.
2. Unsubsidized Stafford. The government backs these loans which helps with interest, however, you have to make payments while you’re in school.
3. Private. I would stay away from private loans, except as a last resort. They will carry higher interest and you will also probably have to find a cosigner. Your credit will be checked and since you’re probably about 18 years old, you won’t have the credit required to get a loan of this type on your own.

If you want to take out Stafford loans, the best thing to do is to walk into your financial aid office. They can provide you with a FAFSA (federal application for financial student aid). You will need to fill that form out, return it, and then apply for your loans. This process is usually quite simple and you will be approved as long as you need the loans and haven’t defaulted on previous student loans.

I would also highly recommend checking out Pell Grants. They never have to be paid back! Using student loans with low interest rates is a pretty good deal but nothing compares to money that doesn’t have to be repaid.