At first glance, variable rates may look appealingly low — 2.25 percent or 3.25 percent — compared to fixed-rate loans that ask for 6–7 percent interest.
But, as Mark Kantrowitz warns on USA TODAY, “variable rates have nowhere to go but up.” If you sign up for that low, low rate now, you risk committing yourself to rising rates for years to come. Typical student loan repayment terms range from 5 to 20 years.
Change your variable interest rate loan to a fixed-rate loan.
While federal student loans are fixed-rate, private loans can be either fixed-rate or variable.
Predatory lenders love to court people who are having financial difficulty because they’re more likely to jump at too-good-to-be-true offers without vetting them.