Tips to Find the Lowest Student Loan Interest Rates

If you’re paying off student loans, you’ve probably noticed that one of the difficult things is keeping up with interest rates. As a result, you could pay back more than you initially borrowed, depending on your interest rate.

That’s why it’s essential to do your possible best to find the lowest interest rates you can get. Here are three ways to get a lower interest rate on your student loans.

3 Ways To Lower Your Student Loan Interest Rates

The best way to lower your interest rates depends on your entire financial situation. If you’re struggling to pay off your student loans, you can always opt for student loan forgiveness. That said, the tips outlined in this guide will help you compare interest rates to get the lowest ones.

1. Get to Know Your Private and Federal Loan Options

You have two options when it comes to student loans. One, borrow from a private lender such as a credit union, bank, etc. Two, get your student loans from the federal government.

Going for federal student loans is usually a better option since they offer flexible repayment plans, and you don’t need a cosigner. Federal loans also come with low fixed interest rates, which stay the same over the loan life.

On the other hand, private student loan interest rates vary from one lender to another. Also, these private loan rates could be fixed. That means they can stay the same every month or variable, thus changing over time.

The interest rate you acquire ultimately depends on your creditworthiness. If you don’t have a good credit score, you can have a cosigner to help you apply. If not, you won’t qualify.

Now, federal student loans come with more protections for the borrower compared to private ones. And they come with several flexible repayment plans.

But if your focus is to save money on interest, you can search around to find a better interest rate. This option is an excellent idea if you’re a parent borrower or a graduate student.

Then, you can select the lender, whether private or federal, that offers you the lowest student loan rates.

2. Get Instant Interest Rate Quote From Several Lenders

If you’re searching for a private loan with low-interest rates, you could use the online shopping trick. What you have to do is to prequalify for an interest rate from a loan lender. You’ll fill a form with basic personal information such as your school, name, and the amount you want to borrow.

Some lenders may ask you to pay each month or in rent, together with your SSN. With this information, your lender will give you an instant rate quote. In addition, they’ll give you some variable or fixed interest rates and tell you if you prequalify for approval.

Remember that these rates represent introductory offers. In other words, it’s not final until you submit an application and the loan lender does a full background credit check. But they give you valuable rates to compare your offers.

Usually, you can see what rate you might get with each loan lender. However, keep in mind that this process is for private loans, not federal loans. So if you’re searching for private student loan relief, compare the rates. It’ll help you find the lower ones.

3. Choose Between A Variable and Fixed Rate

If you’re considering a private student loan, you will have to choose between a variable and fixed interest rate. Most private loan lenders offer both, so it’s up to you to decide which one is best for you.

Usually, variable interest rates begin lower than fixed ones. But they can increase over time. So if you’re planning on paying off your student loan fast, such risk might be worth the savings.

If you select a more extended repayment period, a fixed rate could be an ideal option. With that, you won’t end up paying a much higher interest rate when you begin.

Final Thoughts

Student loan interest rates are constantly accumulating. So it can be challenging to pay off your debts. But if you want to come out of this situation, you need to know how to get the lowest interest rates.

So search around for the loan lender that offers the best terms, especially if you have private student loans. Also, if you have federal student loans, don’t forget student loan forgiveness programs and loan repayment plans. These can also help you pay off your debts.