Students are returning to campus this fall, which means it’s time to start planning for higher education spending the year ahead. This is no easy feat considering that college tuition has grown by 33% since 2000, and this is only a fraction of the total cost of the visit.
Bachelor’s Degree Cost may exceed $ 100,000 or moreand that’s not even counting the graduate school. But federal credit limits remains low at $ 31,000 for all four years of undergraduate studies, meaning that many students need to explore alternatives to overcome the financial gap.
About one in eight families will turn to private student loans to pay for their education. according to Sally Mae… Private student loans can be a good option for students and their families who need to borrow extra money to cover college tuition costs as interest rates are competitive and often lower than federal student loan rates. And since rates on private student loans can vary from lender to lender, it is important to choose the lowest rate possible for your situation.
Comparing interest rates on a private student loan can save borrowers $ 5,000 or more. recent reliable analysis… Find out how shopping around can save thousands over time on student loans and visit Credible to see private student loan offers from online lenders without affecting your credit score.
See How Comparing Student Loan Interest Rates Can Save You Thousands
While federal student loans are provided at fixed interest rates, rates for private student loans vary depending on a number of factors. Private lenders set interest rates depending on the creditworthiness of the borrower, as well as on the total loan amount and maturity.
Borrowers who took out private student loans on the Credible marketplace in June 2019 saw a significant variation between the highest and lowest interest rates they were offered. Here’s how many borrowers paying off average loan balances of $ 20,000 could potentially save in interest, based on the average variation in interest rates across different types of loans:
- 10 year flat rate: Spread 1.68%, Interest Savings $ 3922
- 10-year variable rate: Spread 1.52%, Interest Savings $ 3,472
- 15 year flat rate: 1.15% Spread, Interest Savings $ 3996
- 15 year variable rate: Spread 1.51%, saving $ 5,189 on interest
you can use student loan calculator to determine how much you can save on interest by securing a lower annual interest rate (APR) on your private student loans. To find out the approximate rate for a private student loan, prequalify through multiple lenders on Credible.
How To Get Low Rate On Private Student Loans
Since your interest rate will affect the total amount you pay on your private loans, it is important to try to find the lowest interest rate possible for your situation. This means that you will pay less interest during the loan term, and you save money in the long run… Here are some steps you can take to try and get a low rate on private student loans:
- Work on building your loan before applying. Eligibility for a private student loan depends, among other things, on the credit rating of the borrower. Well qualified borrowers with an FICO rating of 750 or higher will be eligible for the lowest student loan rates.
- Get help from a creditworthy job seeker. Since many aspiring college students have not had the opportunity to build up their credit history, it is common to ask a parent or guardian with excellent credit to apply for a loan. Thus, the co-author will be equally responsible for repaying the loan.
- Sign up for automatic payments. Some student loan lenders offer a discount on automatic payment if you sign up for automatic debiting from an authorized bank account.
- Compare rates for different repayment options. You can secure a lower interest rate by switching to a shorter loan term or variable interest rate. A larger underlying balance can also be accompanied by higher interest rates.
It’s free look for student loan offers on the online credit marketplace Credible. Just fill out one form to see your repayment plans for multiple private student loan lenders, all without a harsh loan request.
If you still have questions about the student loan process, contact an experienced loan officer in Credible.
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