A low interest student loan is a good choice when it comes to financing your college eduction. A low interest student loan is beneficial because it will be a “less expensive” loan, costing you less money over the lifetime of the loan. However, simply because a student loan comes with a low interest rate, does not mean that you should automatically “sign on the dotted line”. There are other factors to consider when it comes to student loans and financing your college education.
First, a low interest student loan is good, but no student loan is even better! If you have failed to check out your free money options for college, you could be missing out on money for school that you will not have to repay, such as money from scholarships and grants.
Second, a low interest student loan should be the first kind of student loan you consider when you determine that you will need to utilize student loans for college, but what type of low interest student loan you obtain is also a highly important factor. Federal student loans which can be obtained by filing a FAFSA are the first type of student loans you should apply for. Not only will a federal student loan be a low interest student loan, but a federal student loan will offer you the best terms and repayment options. Do not skip filing a FAFSA, this is perhaps the most important step when it comes to securing financial aid for college.
Third, even if you find a private student loans with a low interest rate, you should still file your FAFSA before applying for that loan. A private student loan, low interest or not, should always be a last resort when it comes to financial aid for college. Once you have exhausted all of your free money options and federal student loan options, then you can begin looking for a private student loan with a low interest rate, but only if you need it.
Lastly, if you need a private student loan but have poor or little credit, chances are the best way to get a loan at the lowest possible interest rate, is with the help of a cosigner. A creditworthy cosigner for a private student loan can help to make certain you get the lowest and best interest rate possible.