For public colleges and private colleges, the usual median cost or student loan for each semester in college is approximately $7,000 and $13,000 respectively. These figures come after all scholarship and grants are factored in.

For most families, the outstanding costs are covered by means of income, savings, and even loans. It is advisable that other financial sources are utilized to cover these costs, and obtaining loans must be the final option.

There are several things you could do to save yourself from debts that were accrued from obtaining loans. One such thing is to get to know if, in this case, the college can make a provision for payments to be made in installments.

However, if obtaining loans appears to be your last course, here are 3 borrowing options to help you obtain the best student loans in 2018.

Make Use of Federal Loans

The first loan you want to make use of is the Federal Direct Loans for students.


These loans are great because their interest rates are low, their repayment options are flexible, and also, students become automatically eligible irrespective of their credit history or income.

Another benefit of federal loans is that the interest rates are not variable, but rather fixed. This rate does not change but rather applies to each student in the same way.
For the 2017 and 2018 school year, the interest rate stands at 4.45%.

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The good news for low-income students is that Direct Loans only begin accruing interest 6 months after the student’s graduation. Aside from low-income students, this benefit does not apply to anyone else. Instead, the interest immediately starts accruing.

However, for Federal Direct Loans, there is a maximum amount that students may borrow.

For the first year of college, Direct Loans are maxed at $5,500. And the second year, they are capped at $6,550. Subsequent years, Direct Loans are capped at $7,500.

The origination fees for these loans are 1.1%. This means that you will get as much as $5,440 in your 1st year.

All you need to do to apply for this loan is to complete the Free Application for Federal Student Aid (FAFSA) and then log onto the website at to agree with the loan.

Federal Parent PLUS Loans

In the case of some students, the maximum Federal Direct Loans may be insufficient for covering other outstanding expenses that will come up in college.

This is where parents will have to come in and either borrow some more money from a federal program or from a private lender.

Parents with sufficient money, from The Federal PLUS Loan Program provides, to secure other expenses such as transportation, books, etc. Just like with Federal Direct Loans, the interest rates for Federal Parent PLUS Loans are fixed too.

It is 7% for every borrower.
Unless parents request for a deferment, they are required to begin making repayments immediately when their kid is still in college.

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Of course, there are several repayment options available, and if a parent does not pass a credit check, the child becomes automatically eligible for a supplementary $4,000 in Direct Loans.

To qualify for this loan, parents must pass a credit check. What this means is that they must have a good credit history and not have other outstanding debts.

The process for application differs between colleges but usually, a parent can apply for the loan at

Private Student Loans

Another place to look out for loans is from private lenders.
Here is what you must do to get yourself the best student loan rates from private lenders:
Shop Around: The number one thing that you’ll want to do to get the best student loan rates from private lenders is to shop around.

Just as you would shop around for the best prices if you were getting yourself a car, you should shop around if you want to get the best possible student loan rates.

By using websites like and Credible, you will be able to compare the different student loan rates that different private lenders offer.

Look Beyond the Interest Rate: You should not focus your attention on the interest rates. It is very sensible to take a look beyond the interest rates. You want to make sure you are drawing parallels between apples.

Look out for student loans that are offered for the same amount and for the same repayment term, and check to see if the rate is fixed or variable.

Of course, there are other things you must pay attention to as well, such as:

  • How much of the fee gets paid? According to, you should be sure of expecting approximately a 1% interest-rate hike if you pay 3% – 4% in origination fees.
  • What grace period do you have before the payments begin?
  • Are the repayment plans flexible, and will you be able to defer payments?

Is there a provision for borrower rewards, such as a reduction of interest-rates for prompt payments, good grades, or automatic withdrawals?

Make Sure to Secure a Creditworthy Consigner: The fact that a private lender will make you a loan does not in any way imply that you must take it.

If you are one of the many students who have short or poor credit histories, you will surely suffer for it in terms of higher interest rates.

This is why you will need a consigner if your credit history is short and/or not so good. You will also need great credit in order to secure a very good interest rate.

Make Applications for Several Loans: It is good to see what other rates are out there, but it is just as important to apply to them too and not just see them.

You must apply for the loans to secure the interest rates that you have your eyes on. You may be surprised that the rates could turn out pleasantly or not so pleasantly.

Make Sure to be Quick About Shopping for Student Loans: You’ll want to make sure that you are very quick about the shopping and the process for obtaining student loans. It is very reasonable to start now!


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