Rates For Student Loans

6 min read

Private student loan interest rates range from 4.25% – 8.00%. The rates for federally subsidized Stafford loans are fixed at 6.8%, plus an additional 2.06% in fees and insurance. These amounts may vary slightly depending on how much federal aid is applied towards your education.

Federal government subsidized Stafford loans have fixed interest rates of 1.85% to 6.21% based on the amount borrowed and the length of time. There is no annual fee, and the maximum term is 20 years.

Both types of student loans have variable rate options ranging from 5.31% to 9.55%. If you decide to borrow money after December 31st, 2014, you could face a higher interest rate. You should know about these options before borrowing.

Depending on where you go to school, private loans will cost anywhere between $300-$1100 per month, and a federal loan will run around $200/month.

Rates For Student Loans

Interest Rate

The interest rate is the amount of money paid on borrowed funds. When a student borrows money from a lender for educational expenses, the borrower pays interest to the lender for the use of the loan. The amount of interest charged varies depending on the type of loan requested, its duration, and the interest rates offered by lenders. In general, private loans have higher interest rates than federal loans. Higher income borrowers pay lower interest rates than those who earn low incomes.

Loan Term

Loan term refers to the length of time the student must repay the loan after graduation or before beginning repayment of the loan under certain circumstances. There are three categories of loan terms: fixed-term, subsidized, and unsubsidized.

Fixed-Term – A loan with a fixed term is repaid over a set number of years. Fixed-term loans tend to have lower interest rates than subsidized loans, which allow students to defer payment until they graduate. Unsubsidized loans do not have any interest payments during their first two years of enrollment. After two years, they begin making monthly payments to the lender.

Subsidized – Subsidies are loans that are partially forgiven at the end of the loan period. Students may qualify for these types of loans based on financial need and academic merit. Once the loan period ends, a portion of the remaining balance is canceled.

Unsubsidized – These are loans where no forgiveness exists. Students must fully repay these loans regardless of their financial situation at the end of the term.

Terms & Conditions

Terms are written rules that govern the lending agreement between the lender and the debtor. They include things like prepayment penalties, default fees, and late charges. Lenders often attach additional conditions if the borrower does not follow the terms of the original contract.

Interest Rates – Interest rates are the prices that lenders charge borrowers for borrowing funds. The standard loan rate for undergraduate students is 6%. However, loans with lower interest rates are easier to get because they require fewer qualifications and less documentation. On the other hand, loans with high interest rates cost more to finance because they require that borrowers meet tougher qualifications and submit greater amounts of documentation.

Rates For Student Loans

Here’s How To Pay Back Your Federal Student Loan In 8 Easy Steps!

I have been receiving many emails about student loans. Many asking how they can pay back their federal government loan or loans.

In today’s video we take a look at the easiest way to pay back federal loans (and what loan company).

There are two types of student loans – Direct Subsidized Loans and Direct Unsubsidized Loans. If you are borrowing less than $30,000 dollars then you have either a subsidized or unsubsidized loan. And, if you are borrowing $30,000 or more then you have a direct subsidized loan. A direct un-subsidized loan would simply be called a “direct loan.”

As for which type of loan is best just go to our website…

And, for real time updates or to ask questions follow us on Twitter @GoCashLoans

You can choose to apply online or walk in to a branch and apply.

If you need money immediately, apply online and get funds deposited in 1 – 5 days depending on the bank. The fastest way to receive your funds is by direct deposit. You may even be able to withdraw cash from ATMs before your loan comes through, make sure though not all banks do this.

Be sure you check out our videos and blog for helpful tips and advice when it comes to federal student loans. Our site contains a lot of information, guides, articles, and product reviews related to federal student loans.

The best thing about having a federal student loan is that if you decide to drop below half time enrollment by taking long breaks between semesters (that’s three months minimum), then you won’t owe additional money for being late for payment. However, once you reach six months late, then you risk getting hit with over $100 per month fees until you pay off your loan. So, make sure you keep yourself on track to graduate.

Rates For Student Loans

What is the average interest rate for student loans?

The Average Interest Rate On Federal Stafford Loans For 2014 was 4.71%.

What is the average length of time for repayment for a federal loan?

The average term for a federal loan is 10 years.

How much does the government pay towards your student loan?

The government pays 0% towards your student loan.

Rates For Student Loans

Federal Loan Rates

Federal loan rates do not increase for undergraduate loans after March 15th of each year. For example, if your federal loan rate was 6% before March 15th of 2017, then it would remain at 6% until September 30th of 2017. After that date, any future increases would only apply to new student loans.

Direct Subsidized Loans

Direct subsidized loans are loans provided by the government to students who meet certain criteria. The interest charged on these types of loans cannot exceed 8%. If you have taken out direct subsidized loans in the past, they will still count towards satisfying your eligibility requirements for Direct Unsubsidized Loans.

Federal Parental PLUS Loans

PLUS loans are parent-student loans, meaning parents can take out loans to help cover college costs for their children without having to provide proof of income. These loans often have higher interest rates than regular student loan programs (12%). To qualify for PLUS loans, you need to make 120% of the federal poverty level per year. In order to calculate how much money you may receive in financial aid, use the FAFSA. However, remember that additional scholarships and grants may be awarded based on your individual situation.

Private Subsidized Loans

Private loans are offered directly from banks and other lending institutions. These loans generally carry higher interest rates than federal loans, but many private lenders offer lower costs. You should always review the cost of interest before taking out a loan to avoid paying high fees. The advantage of a private loan over a federal loan is that you do not have to demonstrate income or assets when applying for a loan.

Private Unsubsidized Loans

These loans are similar to private subsidized loans except that they are not guaranteed by the federal government. These loans often have slightly higher interest rates than non-guaranteed loans and require less documentation. The disadvantage of a private unsubsidized loan is that there is no guarantee that your lender will pay off the loan once you graduate.

Stafford Loans

Stafford loans are federally backed loans that are designed for those who cannot afford to finance school costs through grants and scholarships. Interest rates start low at 3%, but can go as high as 9%. If you were to borrow $25,000, your monthly payment would be about $260.00. There are some restrictions on Stafford loans, such as needing to attend a public institution. Lenders consider whether or not you plan to repay your debt.

Perkins Loans

Perkins loans are designed to benefit students attending for-profit colleges. This loan program offers a fixed interest rate of 8%; however, the amount borrowed is capped at $23,000. This means that you could potentially receive a maximum of $23,000 to cover tuition costs. Like other loan programs, repayment begins six months after graduation.

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