Fed Financial
what is the average percentage rate on a student loan?
Chase bank offered me 10.5% are there other banks that offer a smaller APR.???
Public Comments
- You need to read this: http://studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsp The Federal Government sets the interest rates on student loans. The current MAXIMUM interest rate on Stafford loans is fixed at 6.8%. The loan you are describing sounds like it is NOT a federally guaranteed loan, it is what is known as "private" financing, and probably will require a credit check or cosigner. The best place for student loans is usually directly through your state's student loan program. In Colorado, the program is called CollegeAccess, and my loans through them are all sitting at a 6.5% interest rate right now, but that will go up here shortly... You should contact your college's financial aid office and ask who their preferred lenders are. Usually one of them will be a non-profit state-sanctioned lender, or some other state-based program. Go through that program.
- There are two types of student loans: federal and private. Federal student loans (Perkins, Stafford, PLUS) are guaranteed by the government and generally have a lower interest rate. Private student loans are offered by banks, credit unions, etc. and since they are not guaranteed by the gov, carry more risk to the lender, and are therefore credit based. The bank will look at your credit history, and the interest rate they offer you will depend on that. If your credit isn't great, it helps to have a cosigner with good credit. In general, you want to maximize the federal loans first, and then get the private money. As always, borrow only what you need, because you will have to pay it back. Here's a list of current student loan interest rates, both federal and private: http://www.salliemae.com/get_student_loan/apply_student_loan/interest_rates_fees/
- It all depends. I took out my original loan at 8.5% but shortly after consolidated it into a smaller montly payment and got a rate of 4.5% . If your rate is higher than 6% I suggest you try and consolidate your loan(s) and get a lower rate.
