Are there interest-free student loans? – Fox business | Vette Leader

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Interest-free student loans exist, but they are extremely rare. Learn about them and some low-interest student loans. (Shutterstock)

Interest-free student loans exist, but they are extremely rare. If you’re looking for ways to lower your borrowing costs, it’s more realistic to aim for low-interest student loans like federal loans and to fill funding gaps with private student loans.

If you are looking for a personal student loan, you can find it at Credible Compare interest rates on private student loans from multiple lenders, all in one place.

What are interest-free student loans and how do they work?

With interest-free student loans, there is no interest—the amount you borrow is the amount you pay back. This type of student loan can save you a lot of money compared to an interest-bearing loan.

Suppose you have a $10,000 interest-free loan with a 10-year term. In this case, you would only pay back $10,000. On the other hand, if you took out a $10,000 10-year student loan at 5% interest, you would pay a total of $12,727 over the life of the loan.

Interest-free loans work just like other types of loans student loans. The lender gives you a lump sum, and you then pay back the loan in monthly installments over a set period of time.

Where can I get interest-free student loans?

Although interest-free student loans are rare, here are some places you can find them:

  • private company
  • Non-Profit Organizations
  • religious organizations
  • fraternities and sororities

Below are some organizations that offer interest-free student loans:

Abe and Annie Seibel Foundation

If you are a US citizen and a Texas high school graduate enrolled full-time at an accredited Texas college or university, you may be eligible for an interest-free student loan from the Abe and Annie Seibel Foundation.

Here are the requirements for this program:

  • Be in the top 10% of your class if you are a high school senior or have at least 23 ACT points or 1100 SAT points
  • Maintain a 3.0 GPA as a college student

Applications are accepted from January 1st to February 23rd each year.

Bill Raskob Foundation

The Bill Raskob Foundation offers US citizens interest-free student loans. You may submit an application if you are at least a second-year student enrolled in an accredited school for the upcoming year.

Evalee C. Schwarz Nonprofit Foundation for Education

You may qualify for an interest-free student loan Evalee C. Black Charity Foundation for Education if you meet these requirements:

  • You are a US citizen
  • You attend a school in your place of residence
  • You have a test score that is in the top 15% nationwide
  • You are eligible for federal grants
  • You’re not aiming for a law degree

Association of Military Officers of America

If you have a parent who is entitled to the Military Officers Association of America or served in a branch of the military, you may qualify for an interest-free loan. Here are the requirements:

  • Must be under 24 (or up to 29 if served in the military before college)
  • Your high school GPA is at least 3.0
  • Male applicants must register for the Selective Service
  • You are not attending an academy prep school or military academy
  • A parent paid for their MOAA membership

If you need to take out personal student loans, visit Credible Compare interest rates on private student loans from different lenders in minutes.

Where can you find low-interest student loans?

If you can’t find an interest-free student loan, look at federal and personal loans student loans. Federal student loans have low fixed interest rates and most do not require a credit check. The interest rates for private student loans, on the other hand, depend on your creditworthiness.

You should exhaust your federal loan options first before considering private student loans. Government student loans offer benefits that private lenders do not, such as: B. Access to income-based repayment (IDR) plans and student loan forgiveness programs.

The best low-interest student loans are federally subsidized and unsubsidized student loans.

  • Directly Subsidized Loans — These loans are available to undergraduate students who have demonstrated financial need Free Application for Federal Student Aid (FASFA). The US Department of Education pays the interest on the loan while you are in school and for six months after you graduate.
  • Direct Unsubsidized Loans — All undergraduate and graduate students can qualify for these types of federal loans — you don’t have to show financial need. Unlike a directly subsidized loan, you are responsible for paying the interest accrued on the loan while you are in school.

For the 2022/23 school year, the interest rate is 4.99% for undergraduate students and 6.54% for graduate students. However, it is important to note that the interest rate on most government student loans has been reduced to 0% through August 31, 2022.

With Credible it is possible Compare interest rates on private student loans without affecting your creditworthiness.

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