Good news for College students! Federal rates are increasingly dropping.
For undergraduates, the rates have been reduced down to 3.76 percent. This will be applicable on a person’s financial need which is known as subsidized, or someone who doesn’t need financial help. The previous rates were 4.29 percent. These rates are set annually and remain untouched for the life of the loan which is typically one year.
For those who are pursuing their graduate studies, loans will be set to 5.31 percent. The previous rates were 5.84 percent. Moreover, the current rate for Plus loans are now 6.31 percent which are lowered from 6.84 percent. The Plus loans are made to the parents of graduate and undergraduate students.
So, if you are seeking loan rates for your school this coming fall, for the concerned individuals, the rates will be lower than the previous year. It’s important to note that the rates depend upon the economic conditions of the country.
For those who want to borrow money for their college tuition, even a slight decrease in rates is a good welcome. Now, the student debt in USA has reached well over $1 trillion. A study found that an average individual in USA has a student debt of $29,000. Moreover, a survey taken out by Fidelity Investments concluded that the reason for people to not save for their retirement was because of the debt of student loan.
Insurance is also one factor which you need to take into consideration when you’re searching for the best rates.
How does the rate get determined on federal student loans?
The rules and regulations set by the Congress state that loans are set each summer.
Is it possible to have the interest rate on student loan decreased by paying automatically?
Absolutely, yes. When you sign up for an automatic payment of your debt, your interest rate can be reduced by at least 0.25 percent.
Does borrowing federal student loans have other fees?
Federal loans depend upon the type of loan borrowed. The fees for such loans range between 1 to 4 percent depending upon the loan amount.
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