Introduction
Higher education is a necessity because of the competitive nature of the job market. However, the cost of education is very high and it is almost impossible for students to meet these costs without applying for loans. The tricky part comes when students have completed school and they have to repay these loans. The job market is shaky and levels of unemployment are at a record high. There is no guarantee that you will get a job once you graduate and that is why it wise to consider the student loan rate on the loan you borrow.
Step 1
If you are looking for a long term solution you should consider applying for a provider that charges a fixed student loan rate. It can be very hard to try and negotiate for an interest rate reduction once you complete school, so it safer to go for a fixed student loan rate from the word go.
Step 2
If you had to take multiple loans to pay for your fees, you should consider consolidating them. When you merge your debts into one loan, the consolidation company offsets your other loans and they offer you a fixed rate. Even if you have one loan to repay, opting for a fixed student loan rate is better since interests rates have a way of fluctuating upwards which causes a financial drain.
Step 3
Having a fixed student loan rate helps you to plan your payments. Furthermore there are no ugly surprises at the end of the month, you know the exact amount you are required to pay. There are numerous consolidation companies and it is advisable to conduct an extensive search before settling on one provider.
Step 4
Another advantage of consolidating your loans is that you get to choose your repayment period. You can even spread your debts for a period of 20 years or more, this definitely gives you peace of mind. Your first stop should be to a federal agency. The government has fair rates compared to other main stream providers. They normally have an eligibility criterion, you should check on the requirements you need to fulfill depending on the state you reside in.
Step 5
Your credit history report will be retrieved before they approve your loan. Having an above average score will help your case, especially with federal loans. However, there are still other alternatives in case your score is less than perfect. You may have to consult private lenders and their rates may be higher, however if you take the time to compare quotes you are likely to get an affordable student loan rate. When mulling through providers look at factors such as interest rates (fixed or variable), grace periods, late repayment fees and repayment period.
Tips
A fixed student loan rate is ideal since it is not affected by inflation, however, the lender may increase the student loan rate in case you default, and that is why it is important to ensure that you repay your loans in good time. This way you also build your credit report and you can negotiate for better terms in future or jump ship to a better student loan rate provider.
Sources and Citations
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