Borrowers with excellent credit and low debt-to-income ratios may qualify for interest rates at the low end of lenders’ ranges.Someone with poor or average credit may be able to get an unsecured personal loan on the strength of a steady income and low debt levels, but should expect rates toward the higher end of the range — up to 36%.This is particularly true for grad school borrowers who use unsubsidized Direct loans and Graduate PLUS loans to finance their education.
These are clearly great programs for people who choose careers in public service or education, but if that’s not you, they won’t do you any good.
There are also a number of federal loan repayment plans that can ease the burden for borrowers facing tough economic times.
With a debt consolidation loan, a lender issues a single personal loan that you use to pay off other debts, such as balances on high-interest credit cards.
You’ll pay fixed, monthly installments to the lender for a set time period, typically two to five years.
A personal loan offers some advantages over balance transfer cards.
Fixed payments ensure you’ll pay off debt on a set schedule.
Once the introductory period expires, the rate on a balance transfer card is usually higher than on a personal loan.
In addition to paying off your balance before the rate increases, you’ll want to avoid making further charges.
We’ve got you covered with our Student Loan Smarts blog series.