Start Best rates for consolidating private student loans

Best rates for consolidating private student loans

These three factors determine the size of your Perkins Loan: The maximum annual loan for undergraduate students is $5500, with a lifetime loan maximum of $27,000.

Students considering this loan should pay close attention to how their total repayment costs might be affected.

Consolidating and extending the repayment schedule of your loans can add considerable costs to your total obligation.

Private loans, also referred to as personal loans and alternative loans can be difficult for students to secure without cosigners. Repayment begins six-months after graduation, and is governed by repayment schedules ranging in length from 10 to 25 years.

Interest rates are higher than federal student loans, but still fall below most other types of private financing (home, car, etc.) The Federal Family Education Loan program (FFEL) is a now-defunct lending program designed to provide American college students and their families with federally backed student loans. Perkins Loans Perkins loans are federally funded loans administered directly by your institution of higher education (IHE).

The questions many borrowers face is, “which is better?

A variable interest rate will change periodically over the term of the loan whereas a fixed rate will not.

Consolidation Loans For students holding multiple federal loans, this program facilitates combining them into a single loan.

A single monthly payment replaces the need to pay each loan individually, and the repayment terms of the loan can be extended for up to 30 years.

To simplify what choosing between the two means: When you choose a variable rate, you are betting that interests rates won’t rise substantially during the repayment term.

If you choose a fixed rate, you are betting that rates will increase. When it comes to federal student loans, you have no choice; your rate will be fixed.

For private student loans, it really comes down to a matter of personal preference and your willingness to accept risk.