Fixed Rate vs Variable Rate Education Loans

Happy July! Hope you all had a festive July 4th holiday!

By now, most colleges and universities have mailed their tuition bills which in most cases  are due in early August! So many friends have contacted me recently asking for guidance with regard to private education loans, a necessary financing tool for many. Many friends are clearly overwhelmed by the task of comparing private education loans, thus I thought it would be helpful to post again about this topic and share some helpful links and tips from Financial Aid Sense.

Interest rates play a huge factor in the overall cost of private education loans (as well as any loan, really!) and one such factor to consider is whether your private education loan has a fixed or variable interest rate. A fixed rate is a rate that does not change over time; the interest rate paid for the loan will remain constant through the entire repayment period. A variable rate is very different as the rate will typically change each month, or in some cases each quarter. A variable rate will either be tied to the LIBOR index or to the Prime index and can change often and go as high as the interest rate cap for the loan. In most cases, interest rates are capped at a very high percent, often greater than 20%! Now that is not to say that the interest rate will ever go as high as the cap, however, the possibility does exist.

Many loan providers offer both fixed rate loan options and variable rate loan options and are based on credit. The better your credit, the better interest rate options you will have. The article on the American Saves website gives a nice overview of credit and the relationship to private education loans. In addition, our article on Private Loans and Credit also shares some good info on the relationship between credit and loans.

When shopping for private education loans, please be sure to compare loans very carefully. Fixed rate loans typically will have a higher interest rate since you are locking in your rate for the entire loan term. Many borrowers like this feature as it gives peace of mind against rising interest rates and allows the borrower to plan their repayment down to the penny. However, for that peace of mind comes a higher priced loan. Those that want the least expensive loan should consider a variable rate education loan, however, need to understand the risk involved with borrowing. If market changes force rates to creep us, the borrower needs to be prepared to repay a higher priced loan.

A Primer on Fixed Rate vs Variable Rate is available on the US News Site – I thought this article might be helpful. Carefully shop around for private loan before borrowing and be sure to ask many questions – See our article about paying for college with private loans and specifically the list of things to consider when borrowing a private loan as a guide – it could save you money!

Thanks for joining us on Financial Aid Sense. If you know of anyone who will be entering either their junior year or senior year in high school, Financial Aid Sense is a vital read!

Jan Marie Combs, EzineArticles Basic Author

Private Education Loan Considerations

Believe it or not, it is late June and that means that college tuition bills will be mailed out very soon, most with a due date of August 1st! Although we hope that many of you have received scholarship monies to cover the cost of college, realistically many need to turn to federal student loans and private education loans to help cover the college tuition bill.

Before borrowing a private education loan program, please please please be sure to carefully compare loan terms from a number of different loan companies to be sure you are getting the best possible loan options available and best for your specific family situation.

There are some helpful resources that you can look at which will help guide you through the process of reviewing and borrowing an alternative education loan.

Check out the articles on Private Loans and Credit, Paying for College with Private Education Loans, Preferred Lender Lists, and Applying for Education Loans. The information will help guide you through the process.

"Financial Aid Book"

Jan Marie Combs, EzineArticles Basic Author

Student Loans and Marriage

Now that is an interesting combination! Student Loans and Marriage! People planning their weddings, for the most part, may not be thinking of student loans and how they are related to their upcoming marriage.

The folks over at bachelorsdegreeonline.com shared this article with me and it has some valuable information regarding student loan repayment and debt obligations of married couples. Certainly a worthwhile and informative read for anyone who will have student loan repayment obligations while married. Check out the article below:

10 Things You Should Know About Student Loans Before Getting Married

As always Financial Aid Sense is here as a timely and pertinent resource for financial aid and the college financing processes. Please spread the word about our newly published book Financial Aid $ense which is a great resource for students who will be juniors and seniors in the fall."Financial Aid Book"

Jan Marie Combs, EzineArticles Basic Author

Saving Money on College

With college move-in days coming up in August, many families are thinking about ways to save money on college expenses. I wanted to share a link to an article on Saving Money on College Costs. This article has practical information on saving money on expenses related to college, such as textbooks, incidentals, on-campus expenses and more. If families plan ahead, there are a number of way to save money on college expenses. Happy reading!

Jan Marie Combs, EzineArticles Basic Author

Financial Aid Sense Supports National GRACE Foundation

National Cancer Survivors day was just celebrated on June 3rd across the country! Financial Aid Sense is supporting the National GRACE Foundation which is devoted to assisting pediatric cancer survivors with the college planning process, including admissions and financial aid planning services, all for FREE! Check out what this foundation is doing and how Financial Aid Sense offering support!

"Financial Aid Sense Supports National GRACE Foundation"

Jan Marie Combs, EzineArticles Basic Author

Saving on College Books

Many college students will be heading off to college this summer so we are thinking ahead and wanted to share some tips on saving money on college books. Please check out the new article in our resource library for many ideas for saving on college books.

Let us know if you have any questions along the way!

 

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Jan Marie Combs, EzineArticles Basic Author

Financial Aid Sense in Online Stores Now

Financial Aid Sense is now available in online stores! New, updated and fresh financial aid information awaits you! An important read for college bound students and their families!

Just wanted to share the published press release about Financial Aid Sense.

"Financial Aid Book"

Jan Marie Combs, EzineArticles Basic Author

Financial Aid Sense – Hot off the Presses!

Announcing that Financial Aid Sense is here! Hot off the presses, this new guide will help you navigate through the entire financial aid process! College financing is a journey – take Financial Aid Sense along to make your journey smoother! Just in time for the upcoming academic year!

Deciphering the financing aspects of a college education can be both overwhelming and stressful. Financing decisions that you make today can impact your life well into the future—thus it is vital that you are informed about the many college financing options available.

Financial Aid $ense was created with the clear purpose of providing a resource for the entire college financing process, beginning with the financial aid application process, award letter comparison, determination of bottom line costs, and strategy for paying the bill and related costs.

By bringing many resources together in an easy-to-follow format, this guide breaks down a complex process, provides valuable resources, shares money-saving tips as well as strategies for navigating through the college financial aid process. The college planning process is a journey! Take Financial Aid $ense along for a better informed journey and have the necessary tools at your fingertips to use along the way!

Fifty percent (50%) of net revenues from this book go directly to support the National GRACE Foundation’s mission of providing free college admission and financial aid counseling services to pediatric cancer patients and their families.

 

Jan Marie Combs, EzineArticles Basic Author

Award Letter Comparison is an Important Exercise

Happy Spring! The admission letters are in and on the heels are the financial aid award letters. With national deposit day right around the corner, we wanted to share an article on Award Letter Comparison in hopes that some of these tips will help make the final decision as to which college to attend. Please see the award letter comparison article for more information. Best of luck making the final decision!

Jan Marie Combs, EzineArticles Basic Author