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Fixed Rate Student Loans

Student loans are the funds that are offered by the federal government and the private lenders to students who desire to pursue post-secondary educational programs. Federal student loans have a lower rate of interest compared to the loans that are offered by private lenders. However, in case of private lenders, students can avail the complete cost of their education which is not possible in case of loans that are offered by the government.

What Are Fixed Rate Student Loans?

Fixed rate student loans are the loans that have fixed rate of interest. These loans can be very beneficial for the borrowers. This is for the reason that the Annual Percentage Rate on interest offered by several banks changes over time. Fixed Annual Percentage Rate enable students to know what payments they have to make and how much they have to repay in total. Variable APRs, on the other hand, may create problems for the students as the rate of interest may increase and they may have to pay more than projected originally.

With the help of fixed interest rate student loans, borrower’s can manage their budget and financial resources in a better way knowing what they have to pay every month and what their total repayment amount is. This is why many students prefer to get fixed rate college loans compared to other types of loans. 

Applying for Fixed Student Loans

To apply for fixed rate student loans, students need to complete and submit the FAFSA form. Once this form is received by the school it will decide which type of a student loan one can avail. Those who apply for fixed rate student loans private need to have a good credit score. If they do not have good credit history, they will have to have a co signer.  Student loans taken from private lenders are popularly known as private student loans. When these loans come with a fixed interest rate - interest rate which doesn’t fluctuate over time – they are called fixed student loans. 

As opposed to that a student loans with a variable or fluctuating interest rate, are called variable student loans. The biggest advantages of a fixed student loan is that the monthly payment remains the same so the long term cost of such a loan can easily be calculated and dealt with. However, a fixed rate student loan may cost the borrower a lot more in monthly payments.

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