With the Dow dropping a record 778 points, Fannie Mae under
FBI investigation and banks cautiously abstaining from giving private loans,
getting funding for higher education has become harder than ever. Yet, with
some savvy internet searching and a keen eye, you can find a low-interest
government loan program or a reasonable personal loan that will suit your needs
without cleaning your pockets.
One of the more well-known government loan programs, the
Stafford Loan is a loan guaranteed through the US Government, which makes
interest rates lower while assuring the lender that all money will be
reimbursed. Although there are some requirements and limitations on the actual
lending amount, it packs a respectable 8.5% interest rate and nearly all
students are eligible regardless of credit history.
Also of interest is the Federal Perkins Loan, which carries
a fixed interest rate of 5% and no accrual of interest until the repayment of
the loan begins. Although the loan amounts are not as considerable as a private
loan (ranging from $4,000 to $40,000), the government is very lenient
concerning credit history and willing to contribute to furthering education.
If you’re still a bit short after exhausting all of your
federal loan options, don’t get discouraged. Acquiring a private loan is still feasible;
just follow a few simple rules and keep your best interests in mind.
A good starting point for jumping into the private loan pool
is finding a cosigner. A parent, sibling or friend with a higher credit score
could make the bank lean in your favor. However, keep in mind that you must
make all payments on time. You don’t want your generous benefactor ending up in
hot water right along with you.
Also, it is of the utmost importance to choose the right
lender. Pick a bank on strong financial ground that offers loans at a reasonable
APR (Annual Percentage Rate). Don’t be afraid to shop around and make sure the
loan you apply for suits your income. Specifically select a loan that includes a
reasonable payoff date and inexpensive monthly payments. This can help you stay
up-to-date on bills and away from the dreaded world of debt.
If you stick to your guns and refuse to be taken advantage
of, you can be successful student on your way to a degree and a considerable
credit score boost.