Congratulations! You have made the decision to take your education to a higher level by attending college. This is certainly a significant achievement own but one obstacle standing in your way is the high tuition costs. No problem, you say, I’ll just apply for a loan. Sounds simple enough but the process is much more involved than you think.The basics of college loan interest ratesFinding student loans is almost like shopping for a new car as you should never make a decision unless you have carefully weighed all the pros and cons. At first blush it can even seem like a daunting task to find a loan that meets your needs as you will most likely be concerned about what your interest rates are going to be.Depending on which loan you qualify for the interest rates are likely to be variable which means that the rates will fluctuate. Before you sign any documents it is absolutely essential that you look over all the terms and conditions. You may even be able to qualify for loans that have fixed rates may be a better alternative if you are concerned about rates increasing in the future.How rates affect your paymentCalculating how much your interest will be on a loan is not too difficult. For example, if you pull out a loan for $15,000 with an interest rate of 6% then you simply multiply the numbers together and divide by 12 months for the year. The number you are left with is $75 which is what you can expect to pay per month in interest fees.While it may be tempting to choose college loans that have a low interest rate it should definitely not be the only deciding factor. Instead you should always compare the Annual Percentage Rate (APR) of student loans as this represents the true cost of a loan. Always get several quotes before you decide on which one to pick.
Education is no longer cheap. In order to avail better education the students are searching for newer and expensive colleges. A better education always pays in the long term. The student will be able to find himself placed in one of the best Fortune 500 companies easily. Even during these times of recession cuts, these companies still provide wholesome paychecks. However, not everyone will be able to afford the high admission fees. Such students will always seek out the best student loans and interest rates. In the following sections, I will outline some of the best methods to find these loan rates.You have to consider something – student loan interest rates vary all the time. You will have to find a financial organization that is willing to provide the loan at a cheaper interest rate. There are two types of loans that are given away to industrious students. They are the federal loans and the private loans. The difference between them is self-explanatory. While the government grants one, the latter is subjected to the conditions laid out by the respective financial organization. If you are new to the niche, it is imperative that you will be confused looking at the two options presented to you.First, we will consider the federal loans. The niche is dominated by two primary loan plans that offer varying interest rates. They are the Stafford loans and the Parent Plus loans. The interest rates for these loan plans are fixed at 8.25 percent and 9.00 percent respectively. Ironically, the interest rate is also fixed according to the ‘era’ opted by you. For example, there is a difference in the rates for the loans given out in 2009 and 2010. Please check out the necessary quotes that can be availed from the respective authorities.The private loans can be granted by a financial organization or by the schools or colleges. The procedures are a bit rigorous this time and hence, please expect a bumpy ride. Not everyone who applies for the loan is granted the same. The authorities will be using a fine comb this time. Unless they find you worthy of the same, you can bid goodbye to such thoughts. Some websites specialize in the niche of displaying the existing student loan interest rates. If you are interested in a loan, then you must be hanging on to those portals for updated information regarding the interests.The intricacies associated with interest rates do not end. Your annual income levels will be gauged appropriately. If they find that you are not in a good position to pay back the loan (which is often true), your parents will have to sign on the offer documents. If in any case you fail to repay the loan amount, your parents will also be held responsible. By now, you might have understood the complexities surrounding student loans and interest rates. If you ask me, I would always ask you to surge ahead with your educational plans.Do not ever let these intricacies stand in between you and your education. Nevertheless, once you get into the college it is healthy to keep the same in your mind – I have come across many students whiling away their time after gaining entry to the best of the educational institutions. Do keep us posted with your experiences, though.