Most students get their student loans through private lenders. These lenders work for companies that aim to make money off these student loans, just like any other type of loan you may take out. While this is good news for the people who work for the lending company, it is bad news for students. Because these companies want to make money, they often offer higher interest rates. However, when you are dealing with the government, they don’t need to make money, allowing for lower federal student loan interest rates.
Not all student loans will qualify for the programs put in place by the government. This is why it is so important to find out if the ones you have do qualify. Talking to a company who specializes in these government programs will allow them to look at the lenders you used for your loans and determine if you will be able to use the government consolidation programs to lower your payments to make them more affordable for you.
The Best Rates
When you are dealing directly with the federal government, you don’t need to worry about the bottom line for another company. This is why you can get the absolute lowest federal student loan interest rates. The government wants to encourage people to further their education. One of the best ways they can do that is by making it easier for people to pay off their student loan debts more easily so students aren’t afraid to take out the loans.
The interest rates set by the government can often change quickly. When they do change, there is no telling which direction they will head. This is why it is so important to take advantage of these programs as soon as you know you are eligible. You don’t want to put off the consolidation of your loans for a little while only to find the interest rates have risen when you put in your application.
The government wants everyone to get the education they desire so they can get a better job. Better jobs equal more money for everyone. This is why the federal student loan interest rates are so much better than private lenders. The private lenders are only in the business to make money, resulting in higher interest rates. If you are eligible for federal consolidation, though, you will be able to lower your monthly payments so you can have more for other bills. However, if it is important to act fast so you don’t miss out if the rates go up.