Several Federal Reserve rate hikes last year they turned everything off buying a house more expensive to pay off credit card debt. For students, this also means that it becomes more expensive to borrow money for their studies.
Luckily, there are still ways to get a competitive interest rate if you’re looking to apply for a student loan this year. Maybe you can qualify for installments as low as around 5% APR depending on the details of your application, although rates can be as high as 15%. And achieved the best possible rate this year save you a lot of money over time — The lower your interest rate, the lower your monthly payments can be and the faster you can pay off your loans in full.
Start now to search for options you qualify for here.
Here’s how to get the best student loan rates this year
Interest rates can be higher across the board, but take these steps to ensure you qualify for the best possible student loan rate this year:
Compare different options
When it comes to student loans, it can be worth doing some research. You can qualify for very different interest rates from different lenders.
If you think about it Federal student loansthey have fixed interest rates that range from 4.99% to 7.54% for the coming year depending on the type of loan you get.
For private student loans, the lender you choose will have a big impact on your interest rate. A good way to compare the plans available to you is to look for a pre-qualification. You can go to a lender’s website and enter your information and then find out if you qualify for a loan and an interest margin. By checking your pre-eligibility with a few different lenders, you can easily find the best rates for you.
You can start by exploring the student loan rates available to you here.
Decide between fixed and variable rates
Personal student loans can have fixed or variable interest rates, and the type of interest rate you choose can have a long-term impact on the total amount you pay.
A fixed interest rate allows you to lock in your interest rate for the life of the loan. With today’s rising interest rates, you should opt for a student loan with a fixed rate so that you are not affected by further interest rate increases. Federal student loans all have fixed interest rates. If you choose a private lender, some offer slightly lower interest rate spreads on fixed loans compared to an adjustable loan.
Floating interest rates, on the other hand, change over time as interest rates rise or fall. While we can’t predict the future, variable rate can be a good option if you think interest rates will go down before you fully pay off your loan, reducing your overall payments.
Increase your credit rating
Like other loan types, your credit-worthiness often plays a big role in what student loans you can get and on what terms you qualify.
Excellent credit can increase your chances of qualifying for today’s best student loan rates – which can be as low as 4.5% to 5% APR with some lenders.
There are a few different factors that can go into your overall credit score, but making monthly payments on any open credit accounts you have both in full and on time is a good place to start. If you have credit cards, make sure you keep your utilization low and avoid spending close to your credit limit. Practicing good borrowing habits over time can help you build and maintain good credit, which helps you get the best interest rates whenever you borrow money.
If you’re still working on your credit score, another way to qualify for the best rates is to apply to a co-signer who has excellent credit and can help you qualify. Check out the plans you can qualify for now.
Take advantage of discounts
Some student loan lenders offer discounts and incentives for certain activities that can help you reduce the interest rate assigned to you that year.
If you’re already paying off your loans, you might be able to lower your interest rates by a certain percentage by setting up automatic payments each month. Some lenders also offer loyalty discounts for customers with existing loans or banking products. For example, SoFi offers a 0.125% discount on your interest rate if you or your co-signer are existing SoFi members. Others offer incentives for good grades with GPA requirements.
The final result
Interest rates have gone up, but you can still save on student loans by making sure you qualify for the best rates available. Make sure you compare different lenders, research rates, and take advantage of any discounts you may qualify for. By getting the best interest rate on your loans today, you can reduce your repayment time and overall loan amount, allowing you to pay off your debt faster over time.
Learn more about the student loan rates you may qualify for in your area today.