- Personal Finance»
- Mortgages & Loans
The Best Fixed Rate Student Loans
If you've found this article, chances are you are aware at how much cheaper fixed rate loans are in the long-term. Finding the appropriate loan for students and parents will allow you to kiss fluctuating payments goodbye and reduce stress and financial trouble. New laws, enacted in 2006, provide modern alternatives and paths to a degree without resorting to tricksters and frauds.
This article will guide viewers though choosing and acquiring a loan, from eligibility to repayment plans (and every little detail in-between). I wish you the best of luck in finding a plan which is suitable for you, and I hope that this article will be of use.
If you need to obtain a social security number in order to complete your loan, please click on the following link:
For information and registration for Selective Service, please view this link:
In order to qualify for a federal loan, you must answer to the following prerequisites (private creditors may have their own guidelines):
- You must have attained a High-School Diploma (or alternatively a GED certificate)
- Pass the college entrance exam
- Be a U.S citizen or an eligible non-citizen
- Must possess a valid Social Security Number
- Enroll for selective service (see help tab on the right for more information)
- You will also need to sign a Free Application for Federal Student Aid (FAFSA) to legally assure your creditors that you will only use the funds for education and nothing else.
Got all that?
Federal Undergraduate Stafford Loan
The federal Stafford loans features a simple fixed rate loan of 6.8% which remains fixed for the entire life of the loan. This has become a popular option because of its federal guarantee, meaning that it is perfect as a student loan for bad credit histories.
- No credit check required! - Unlike many private loans, the federal government will guarantee your loan, you will not be asked for a credit report in order to appear eligible.
- Low Simple Interest - Rates remain low and fixed for the entire duration of the loan (assuming you remain and progress in college, of course). For a full list of subsidized and unsubsidized loan disbursement rates please click on the following link: Stafford Fixed Rate Student Loans
- Liberal Repayment Options - Unlike many back-breaking 30 day repayment deadlines for post-graduation. This loan grants you 180 days to begin paying back your debt.
Freshman - $3,500.00
Sophomore - $4,500.0
Junior - $5,500.00
Senior - $5,500.00
Freshman - $7,500.00
Sophomore - $8,500.00
Junior - $10,500.00
Senior - $10,500.00
- Limited Loan Amount - The amount varies depending on factors such as dependence and how far along in college you are. The bottom line is that the disbursement may be to low for some people to get-by on. The table on the right will give you a rough indication of what to expect.
- Requires FAFSA - Please click here for more information regarding FAFSA filings.
- Each year requires a separate loan, while not intrinsically a disadvantage, it is a bit of pain in the rear end.
The Federal PLUS loan is a direct loan targeted not at students, but at parents. Due to the limit disbursement plans of most fixed rate loans, taking out a PLUS loan may be enough to cover academic costs without resorting to compound interest. These loans are fixed at 7.9% and include a 10 year repayment schedule. Additional eligibility requirements are required for parents:
- The parent must be the legal (adoptive or biological) parent
- Must pass an "in good standing" credit check
- Eligible for all parents, and allows them to extend their good credit to their children.
- Fixed Interest Rate - equating cheaper financing
- Can cover up to 100% of all tuition needs
- Can be consolidated with other loans
- Requires that students only be enrolled as part-time students.
Master Promissory Note?
First time loaners are required to file this legal document in which you promise that you will repay your loans. Not really a disadvantage as such, just another bureaucratic pain in the rear to contend with.
- Credit checks and history are required
- You must file an MPN (check tab to the right for more information)
- Repayment begins relatively briefly (I've heard mixed reports of 30-60 days after graduation)
- FAFSA - again!