Well, if you have decided to get a financial aid in terms of Students Loans to pursue your dream education then you will have to conduct your own research first. While researching on the student loans you will come across different types of student loans available for you however, the first priority of your concern should be the interest rate. Different loans come with different interest rates, most of them come with fixed rate, and some come with variable interest rates.
To obtain any students loans you should have a proper insight about the type of interest because whatever you borrow you will have to payback. Fixed rate means a fix or same amount of interest for the entire time frame until you pay back the loan for money you owe to that loan. The other is variable rate of interest where the interest rate fluctuates according to the market conditions.
If you are aware of the federal student loans then you should know that all the federal loans have a fix rate of APR and will remain the same for entire time of your loan, which can be up to 25 years. On the other hand, private student loans differ in interest rates according to the offerings and always have a higher rate of interest than the federal student loans. Therefore keeping private loans as the last option is the wisest decision after you have exceeded the limits of grants, scholarships and federal loans.
Although if you decide to apply for the private student loans then you need a consignor that can also be helpful for students with bad credit rating. In most of the cases parents act as consignee however students are allowed to place any willing adult with a good credit record as consignor.
As of now fixed interest rate, student loans are best for you as it will always provide you an idea of exact amount of interest you will incur in the course of repayment that lasts for a decade or two. The other benefit you receive from the fixed interest rate loans is the option of consolidation in the future to repackage all your loans in one loan and having secured a single monthly installment against all the sum of loan amount. This will also relieve you from your further worries if you have multiple loans, as you are liable to pay only one installment controlling your monthly outgoings.
Thinking about the variable rate of interest then you are actually gambling your future as you never know how much you will be earning in future and what market conditions will be there after 10 or 20 years given the period of 25 years for the repayment of student loans. Predicting the future behavior of the financial market is not a Lehman’s job and this is the reason why many of the students willing to take student loans for their further studies prefer fixed interest loans. Stafford loans is one of the best choice for obtaining federal student loans with fixed interest rate and so far many students have secured their lives and completed their studies using this loan. Now, although you got all the required information about how to shop for the student loans you need to have your own search ready so that you do not gamble on your future.