Student Loan Interest Rates

Understanding student loan interest rates and total loan costs

Most families will need to cover the gap between what they can afford to pay for college and the actual final cost by securing private loans. But how do you choose which loans are the best for your family?

Experts say more than $150 billion in financial aid is available each year for post-secondary students. Make sure you begin the student loan research process with the FAFSA and federal student loan options, as these will have the lowest interest rates available. Once federal options, grants and scholarships have been explored, private student loans can be used to cover the remaining education expenses.

Factors to consider for private student loans

There are several factors that parents should take into account when considering a student loan lender:

  • Competitive student loan interest rates - This is most likely at the top of the list for most parents. Make sure to scrutinize and compare both the prevailing student loan interest rates and any associated fees.
  • Fixed or Variable? - You'll also need to assess whether fixed or variable college loan interest rates are better for your situation. Does the lender offer both options?
  • Annual percentage rate (APR) - What is the APR, or the amount you will pay in interest charges per year? APR affects how much total interest you will pay by the end of your loan's term.
  • Flexible repayment and deferment options - Does the loan give you the option of switching to an alternative repayment plan in the event your student's or family's financial situation changes? Will you have the flexibility to secure a loan deferment in certain situations?
  • Quality of customer service - Are the institution's online capabilities strong? Can you get your questions answered in a timely manner?
  • Loan resale - Will the lender eventually sell your loan to another institution, and if so, how will that change your service quality?

Looking for more college loan information? Browse our student loan FAQ.

Now that you know more about college loan interest rates, check out Charter One's offerings

Find additional student financing resources for students and parents and get helpful information about our TruFit Student Loan™. If you still have questions, call a student loan specialist at 1-800-721-3969, and we'll help walk you through the process.

Additional student loan and college planning resources

How Much Should I Borrow?
Direct vs. Indirect Costs of College
Understanding In-State Versus Out-of-State Tuition
The Cost Differences Between Public and Private Schools
 
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