fixed interest rate student loans
What are Fixed Interest Rate Student Loans?
Media, students and parents have consistently criticized the expense of getting higher education. Fixed interest rate loans are probably the best student loans as a student has to pay a lower interest rate.
- The loan in most of the cases is a secured loan, but if it is of a smaller denomination lenders also consider giving it off as an unsecured loan.
- A positive feature of such a loan is that it does not have a credit rating requisite, and the interest rate that is levied on it does not depend upon the credit score. The logic is simple, that as most of the borrowers are students they would not have any credit history and credit reports. Hence, students have an advantage over the rate of interest.
- The rate of interest of this loan is fixed for every installment. Thus the borrower is able to logically plan out the entire repayment. The rate of interest which is substantially discounted and subsidized can amount to anything between 4% to 10% p.c.pa or APR.
- The repayment of the loan, conventionally, starts after the person concerned has graduated from the course. In some cases the repayment starts immediately after the person commences the course. In the graduating years, the amount of one installment remains quite low and easily payable.
- The last merit that I can state is that the persons concerned with the loan, namely the borrower and cosigner, do not have to be tense about the credit ratings and report implications, as late payments do not have drastic drops and negations. The only drastic implication is a negation of credit ratings, in case of a student loan default, the rate of which is quite low.
- Educational Loans by Governments: In the United States of America, there are 4 primary facilities that provide loans to students so that they can fund their own education. The Federal Stafford Loan and the Federal Perkins Loan are directly provided by the U.S. Department of Education. Stafford loans have become fixed interest rate students loans as of July 1, 2006. Perkins loans are charged with 5% interest rate and is subject to several other different limits, depending on the level of the course that the pupil is undertaking. Another educational aid that students can avail is the Federal Direct Student Loan Program, which provides some great low interest loans. The fourth option that one can avail is the PLUS Loan for students.
- Banks: Taking the challenge of educational aids and funding, many banks, which had earlier abstained from specific loaning, have shifted their focus to the concept of student loans. Major banking icons that provided such loans include Bank of America, Bank of North Dakota, Commerce Bank, Sovereign Bank, etc. These nationally and internationally recognized banks provide governmental loans (regional as well as federal) and also provide several private loans.
- Private Loans: There are countless financial and lending institutions that generate fixed interest rate loans. The Citi Group, Sallie Mae, Discover, PNC, Wells and Fargo are some common names of private lenders.