Student Loan Discounts

If you are looking for some College financing to help you get the education that you want, you may want to start doing some research now. Did you know that when you take out a student loan that there are some discounts available? There are so many lenders out there that offer student loan discounts, they do this to promote and encourage the students or parents to take out student loans from them. Back in 1965, the High Education Act set their rules with a maximum rate of interest on student loans.

College Funding is a competitive business, since there are thousands and thousands of students filing for loans every year. The amount of some of the discounts offered are a 1% decrease in the interest rate after paying off your loan on time for 3 years. On Stafford Loans, there are 2% reductions on interest rates if you have made your payments on time for 48 months. These reduction discounts have to be on time. There are some loans that allow a 3.33% interest rate reduction after on time consecutive payments for 3 years.

There are also discounts available on Direct Loans, these discounts are as follows, a .25% decrease for automatic debit payments and a 1.5% rebate at the time that the loan is given out and the payments must be on time for 12 months consecutively. Students who have qualified for these loans are 18.6% are Stafford Loan Borrowers and 40.4% are PLUS Loan Borrowers. These numbers could increase if students can make their payments on time, but with the economy the way it is, there may be a decrease in the amount of students who are able to pay their loans on time.

Here are some things that you need to know about these discounts. There is usually a one time payment that has to be made on time, which includes the grace period of about 10 to 15 days. You can also sign up for automatic direct debit. Check with your lender and you can sign up to have the money automatically come out of your bank account. There are some rebates that must be repaid; these are fee rebates and principals on the loan. Make sure that you read the fine print when it comes these loans and their discounts.

There may be a minimum balance that is required for discounts. The best way to find out which loans have the best rebates is to do some research. It may take some time but in the end it can really pay off. Talk to your high school guidance counselor about student loans with discounts. Check out the monthly guide as to when these discounts are available.

That is why it is important for you to start looking now; the beginning of the school year has the most information for the upcoming school year. Make a list of these lenders and when the time comes you can go down your list and make the necessary inquiries.