Let’s face it: the repayment of student loans is very expensive. People will agree if they have borrowed money before through a student loan. Individuals must then have realized that most of their monthly payments do not go to repay their loan. In most cases, it goes to finance the accrued interest in their account, and they are left with their loan intact. If the interest rates are very high, students find themselves with more loan balance than the actual borrowed loan. However, all is not lost as there are few ways they can follow to save money on their student loan. Here, people will learn five easy ways to get lower interest rates on their student loan. Let’s dive in!
1. Shop Different Lenders
Do people know that different lenders have different loan repayment terms and interest rates? Therefore, it is advisable to compare different student loans to ensure that they get the best rate for the loan that they qualify. Alexander Djerassi advises students to look at various parameters such as annual percentage rates as it is the most accurate way of comparing interest rates. The parameter gives an accurate picture of the loan cost, including accrued interest.
2. Have Excellent Credit
It won’t be possible to have a lower interest rate if a student’s credit score is not excellent since private student loans are based on credit score. It means that the higher the credit score, the lower the interest rates. Furthermore, lenders will evaluate their income and other debts that they own, and if they own other debts, they will be given high-interest rates. If they have high debts, they better forgo the student loans altogether.
3. Sign up for Autopay
People want to lower their student loan interest rate, right? They should then sign up for autopay as students who repay their loan through auto-pay get a 0.25 points reduction in their loan interest rate. There is another reason why individuals should sign for auto-pay; it brings peace of mind as they don’t need to worry about missing a payment accident. Isn’t this great?
4. Apply with a Co-signer
All is not lost if students do not have a high credit score or if their income is not high enough. In such a scenario, it is advisable to apply with a co-signer as they are guaranteed a lower interest rate. However, this is only possible if the co-signer has a solid income and good credit. If someone doesn’t make payments, the co-signer will be responsible for making payments on their behalf.
5. Build a Profile
Factors such as the college someone chooses to study, the college they go to, and their academic records play a vital role in getting the lowest student loan interest rates. Therefore, Alexander Djerassi thinks it is advisable to keep an impressive profile as it influences the lenders to provide low-interest rates on student loans willingly.
It is possible to save money through lower student loan interest loans by following the above easy tips. Congratulations as students put them into practice.