It’s important to have a solid educational background to help your future shine a little brighter. But sometimes, education doesn’t come for free. Whether you’re anticipating higher education this fall or looking to get better student loan interest rates on your existing student loans, we have a few secrets that can help with that.
1. Fixed vs. Variable Interest Rates
It helps to know that there are different types of interest rates before you begin. There fixed interest rates that stay the same throughout the length of your loan and repayment. And there are variable interest rates that can fluctuate according to a specified entity. Variable rates are very eye-catching because they tend to start out lower than fixed-rate loans, but budgeting these loans can get a little tricky since it will change over time, and likely your monthly payment as well.
2. Add a Cosigner
If you have a weak or no credit history, you may struggle to get a loan with more favorable interest rates. But if you have a cosigner, you may see more optimistic numbers as well as a better chance of getting your loan approved. It helps to have a creditworthy cosigner, someone who has good credit and can ensure that the loan is repaid. If you are lucky enough to get a loan without a cosigner, you should still consider adding one for increased benefits.
3. Read the Fine Print
Whatever options you are considering, be sure to read the fine print. Hidden in the “stuff that nobody reads” are some secrets that you can exploit to your financial advantage. By agreeing to certain loan terms you may be eligible for better interest rates. Things like signing up for automatic payments, beginning repayment while you are still in school or choosing a shorter-term are just some of the trade-offs you can make to get the best rates. You can also consult a loan specialist when making your decision to be sure that you are truly doing what is in your best interest.
4. Research and Compare
There’s nothing like a little research and comparisons when it comes to making big life decisions. Financing your higher education is certainly no exception. There are private loans and federal loans to think about. Each has their benefits and drawbacks that need to be considered. Federal loan rates tend to be lower than private loans. You may also want to strongly consider refinancing an existing loan to secure a lower interest rate. Continuing to pay as much as you can afford to pay will help eliminate the debt faster. Loan consolidation is another option.
Going to college, vocational or trade school doesn’t have to saddle you with debt for the rest of your days. Making an informed decision will benefit you for years to come. Be sure that you remember these tips when you start loan shopping. You don’t have to be at the mercy of unreasonably high student loan interest rates.