The Stafford federal student loan interest rate is always the best option because these rates are most attractive and so too are their loan terms. In addition, the benefits are better than what you would get if you were to apply for another kind of student loan. The federal student loan interest rate for all Stafford Loans are actually fixed and they can also be deferred if you don’t want to repay the interest until after you have graduated out of school; or, you can pay the Stafford federal student loan interest rate on a monthly basis. However, deferring payment of the interest means that the interest will be capitalized and then added to your outstanding loan amount.
Understanding Federal Student Loan Interest Rate
The Stafford federal student loan interest rate for the academic year 2009-2010 stood at about 5.60 percent for an undergraduate and subsidized loan while the federal student loan interest rate for a Stafford loan for an undergraduate unsubsidized loan was 6.80 percent.
Of course, federal student loan interest rate for Federal Stafford and also PLUS loans that are to be disbursed prior to 1st July, 2006 have variable rates of interest. Such variable-rate federal student loans can be adjusted each year on 1st July. The federal student loan interest rate are actually calculated according certain formulae that are tied to the yields accruing through short-term Treasury securities during the end of May and the month of June. Individual lenders, however, can offer lower federal student loan interest rates to borrower-students.
Similarly, federal student loan interest rate for a Stafford Loan that was disbursed between 1st July, 1998 and up to 30th June 2006 in which the borrower-student is still in school and who is also in the post-schooling grace period and who are also in authorized deferment can be calculated according to a formula: Bond-equivalent rate for ninety-one day T-Bills plus 1.7 percent but the end interest rate cannot exceed 8.25 percent.
For variable federal student loan interest rate for Federal PLUS loan disbursed between 1st July, 1998 and 30th June 2006 is calculated according to the formula: Bond equivalent rate for ninety-one day T-Bill plus 3.1 percent but which cannot exceed 9 percent.
If you need to take a federal student loan you must first get hold of as much federal student loan information as is possible. This information should provide you with advice and tips on how much money you should borrow and how you can qualify for a federal student loan as well as teach you how it is possible to get the loan.