Don't Miss Out on a Low Interest Student Loan

A low interest student loan will only be available to those applicants who can prove they are credit worthy. However, you do not have to have a high income or high asset base to be deemed credit worthy. In fact, the federal government may assist you in obtaining a lower risk loan, reducing the cost of financing over time.

Federal Guaranty Programs

Most students will have low credit scores because they have a short financial history and low income. Even if the student never misses a payment on a credit card, very few of them have shown enough credit history to get a loan. In order to assure against the default without using collateral, students can look to a federal guaranty. With this option, loan programs like the Stafford Program offer to purchase the loan out of default if the student cannot pay.

Getting a Low Interest Rate

Some federal direct loans are need based. However, most guaranty programs are not only based on need. These means any student, even if the student can afford a private loan, may use a federal guaranty to reduce the cost of financing. To qualify, a student will need to prove credit worthiness, but the loan standards take into account the unique credit factors that typically harm students.

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