How to Find a Low-Interest Student Loan

Video Transcript

"Hello, I'm Cheri Ashwood. I'm a Guidance Counselor and today I'm going to tell you how to find a low interest student loan. Student loans either are through the Federal Government or private lending institutions may have variable or fixed interest rates. Interest rates are basically going to be determined by a few different things; your credit history; luckily Federal loans don't rely on a credit history for first time college students. But also, just where are interest rates at that time; what are the standard interest rates. If it is the time in the nation where interest rates are low, you're going to be able to find lower interest rates. If your credit rating is good, depending on the type of loan. If we're in a financial situation where interest rates are high, your interest rates are going to be hire. If you have a variable rate loan or a Federal student loan which actually turns out to be a series of loans awarded to you over the time that you're in school, every semester they just build up the loans, consolidation upon the time that you graduate or separate from school is going to help you lower those interest rates. And basically a consolidation company buys your student loans from the institution in which you got your loan, sometimes from the Federal government, they lump them together and give you one fixed interest rate. The fixed interest rate is usually going to be your best bet for having a low interest rate. Prior to applying for loans, you can always try and raise your credit score or your credit rating by opening accounts and paying them in responsible and timely manner or having a co-signor; someone that you trust that also has a good rating. This may help to lower your interest rates on your student loans. You can also avoid loans altogether by applying for scholarship and grants and possibly, having a job and saving money. I'm Cheri Ashwood, I'm a Guidance Counselor and your future starts today."