Asked by Victor  |  Submitted August 28, 2015

Who offers the best interest and fees on a student loan?

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  Answers  |  1

September 01, 2015

Great question about student loans and their rate and terms.

The best rate/terms will be from the government.

Direct loans are 4.29% (Up to $3,500 per year can be subsidized while in college making the effective interest rate 0% for that portion of the loan.)
Perkins loans are 5%
Parent PLUS loans are 6.84% depending upon credit

Beyond the government:

Here's the top 4 national banks and their current (2015-2016 school year) fixed rates.

Discover Student Loan - 5.99% - 11.49%
Wells Fargo Collegiate - 5.94% - 10.72%
Sallie Mae - 5.74% - 11.82%
Citizens Bank - 5.75% and up

Remember that the student will require a co-signer for all but the government loans. Being approved and the rate will be based on the credit rating and borrowing capacity of the co-signer.

You should know that a new application is required each year. I see parents every year who co-signed for loans for their kid in their freshman and sophomore year and then don't qualify in the junior year. What do you think those students are doing now? If you guessed dropped out and working, you're right.

In addition to the national banks, I would check with your local banks & credit unions to see how competitive they are.

I hope this helps.

Charlie

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