Though its possible to get private student loan with low interest rate but still best choice is federal student loans. There is no doubt about that lower interest rate student loan is more beneficial because lower interest rate means lower payments and shortened repayment period and more money in your pocket.
Another beneficial aspect of low interest student loans is the subsidized federal student loans. If you get a Stafford Loan or Perkins Loan then government will pay the interest while you are in school and even up to nine months after you graduate.
Two Major Types of Low Interest Loans
The major type of Low Interest Student Loan is a federal, now we will look which types of federal student loans offer extremely low interest rates and other benefits to students.
Stafford Student Loan
Stafford Student Loan is a low interest rate student loan that allows the students with to no credit to afford college. As federal student loan Stafford Loan has different requirements than standard lender like bank. This loan is not based on your credit score; it is based on whether or not you fall within the eligible income bracket. In its basic requirements is that you will attend school at last half time and if you have never defaulted on a loan before.
There is a limit of interest rate on Stafford loan that how high it can be. Currently interest rate on that is 8.2% though most people get a rate that is lower than this. The main benefit on Stafford Student Loans is that it’s subsidized, meaning that the government will foot the bill for the interest that accrues while you are in school. Stafford Loans are also available unsubsidized but the low interest rate still applies.
