Lower Loan Rates and Credit Unions Open Doors for Students
Due to a separate provision in the recent healthcare overhaul, the fine line between private and federal loans created by banks and lending companies has become more favorable to borrowers. New private-loan incentives and help from credit unions are making it easier for students to attend college.
Competition among lenders is growing as these recent developments encourage more students to seek college loans. Among those lenders that have dropped rates are Sallie Mae, Royal Bank of Scotland Group PLC’s Citizens Bank, and SunTrust Banks Inc.
“If debt weren’t an issue, I wouldn’t even be here in law school,” 24-year-old Mississippi University law student Caroline Andero told the Wall Street Journal. “I would maybe be in a third-world country doing community-development work.”
But with these recent changes to student loan programs across the country, Andero has found a reasonable repayment program. Lenders such as Sallie Mae have begun new repayment programs that allow borrowers to repay their loans for as little as $25 a month.
While rates and fees are dropping, students and parents alike should be aware that many lenders require near-perfect credit scores to qualify for these loans. Another option for those who don’t meet the requirements is credit unions, which offer non-federal loans with average interest rates around 6.25 percent.
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Date: July 13, 2010
Categories: Credit Score