When it comes to paying for college, sometimes you need a little extra help. If you have already exhausted savings, scholarships, grants, and Federal student aid, private student loans are the next place to look to pay the bills. While private student loans tend to charge a bit more than Federal ones, when they go to use for a valuable degree, they can be very much worthwhile.
Federal student loans, also known as Direct Loans, are funded by the government and may be awarded as part of your financial aid package if you completed the Free Application for Federal Student Aid (FAFSA®). They feature fixed interest rates and offer several repayment options. Private student loans are offered by banks or other lenders, are credit-based and have fixed or variable interest rates.
When it comes to Stafford, Perkins, PLUS, and Direct Consolidation loans—which make up 85 percent of education debt—there are five repayment options. They range from the standard plan, which requires a minimum payment of $50 every month for up to 10 years, to the new, income-based plan that caps your monthly payments at a “reasonable percentage” of your income (determined by the federal government)and forgives any debt remaining after 25 years. So which schedule is best for you?
For example, you may see variable rates advertised as low as 2.5% APR and fixed rates starting around 3.9% APR. But this is a sunny day scenario. You and/or your cosigner would need to have the right qualifying credit score or credit factors to achieve the lowest rate, and the lender may impose requirements such as signing up for auto-debit from a checking or savings account to lock in these low rates. When comparing lenders, look for the asterisks and footnotes along with the fine print to understand what it takes to achieve or put you in the running for the advertised rates.
Variable Rates: Starting variable rates range from 3.65% to 11.25% APR (with autopay), and will never exceed 13.95% (sometimes lower in certain states as required by law). For variable rate loans, the variable interest rate is derived from the one-month LIBOR rate plus a margin of between 1.58% and 9.98%. The current one-month LIBOR rate is 2.27%. Changes in the one-month LIBOR rate may cause your monthly payment to increase or decrease. Interest rates for variable rate loans are capped at 13.95%, unless required to be lower to comply with applicable law.
to have an outstanding balance on a Federal Student Loan received under the Direct Loan Program and not the ones under the Family Education Loan (FFEL) Program, the Stafford Loan Program, the Perkins Loan Program, the Grad Plus Loans Program, or others Federal loan programs. If you have FFEL or Perkins Loan program, you can consolidate it. Learn more about a federal student loan consolidation.
U-fi® is a registered trademark of Nelnet, Inc., for products and services provided by Nelnet Consumer Finance, Inc. You should exhaust lower-cost federal borrowing options before turning to non-federal loans. You are, of course, not limited to seeking loans or other products from U-fi.com, and are free to obtain information and loans from all other providers of student loans and related products.
Fixed rates currently run from 4.99 to 10.49% APR. LendKey is able to offer better than average rates because of the unique funding model. Credit unions are not for profit financial institutions, so they tend to offer more favorable rates and fees for all available products. With LendKey in the middle, you get a simple, high-tech experience with the savings and community power of a credit union.
CommonBond has no application or pre-payment fees, interest rates are competitive, and co-signed loans have no origination fee. (Its medical school, dental school, and MBA loans have a 2% origination fee.) Loans are available for undergrads, grad students, and parents. Interest rates for those loans range from 3.69 to 9.74% APR with 5 to 15 year payback periods.
Also be aware that many private student lenders require a cosigner, usually a parent or other relative who would take over responsibility for the loan if you stop payments for any reason. That also means your payment activity impacts their credit score, so if you do sign up for a loan with a cosigner it is important to both of you that you pay on time.
What’s the best way to make additional payments to pay off student loans fast? Make your regular payment on time via auto-pay and then schedule another extra payment for the next day. Under federal regulation, lenders apply your payment to late charges or collection costs for your loan, then to any outstanding interest accrued since your last payment, and then to your principal. Private lenders typically follow suit.
This site does not negotiate, adjust or settle debts. All federal student borrowers are able and encouraged to apply for any federal repayment or forgiveness programs through the US Department of Education for free without paying fees to any entity. Nothing on this site constitutes official qualification or guarantee of result. StudentDebtRelief.us is a private company not affiliated with the Department of Education of the Federal Government.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
Student loan Refinance: Fixed rates from 3.46% APR (with AutoPay) to 7.61% APR (without AutoPay). Variable rates currently from 2.31% APR (with AutoPay) to 7.61% (without AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.31% APR assumes current 1 month LIBOR rate of 2.31% plus 0.75% margin minus 0.25% for AutoPay. If approved for a loan, the fixed or variable interest rate offered will depend on your credit history and the term of the loan and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.
I was realy disappointed because I read that you can withdraw 6 times. So I assumed that when I withdraw from my 4 classes their wasn’t going to be a problem, until I was told by one of the ladies in the cashier department that you can not withdraw from all of your classes in one semester. I told her it did not specified that you could not withdraw from all your classes in one semester. I felt that wasn’t right that I have to pay back the amount I was told. So I couldn’t finish my career. I was really dissapointed. So if I could get some help to pay back that amount, then I could finish my career. I was going to school to learn a trade to get a better job.
Ascent student loans is not as well known as some other student lenders, but its unique Independent loan makes it a good option for upper-class undergrads and grad students. It also offers a cosigned loan, which is more typical in the private student loan market. But for full-time juniors, seniors, and grad students, Ascent may be one of the few options to qualify for private loans and rates are competitive.
Say, for example, you have a couple with a combined college debt of $50,000. Annually, they are making $100,000 combined in salaries. By establishing a budget with a goal of 3-years completion, they can make the necessary adjustments in their day-to-day spending to meet that goal. This budgeting might even reveal more money they can put toward diminishing the principal balance.