Student Loan Finders

Updated on 9/20/2010: An earlier version of this story omitted an organization that make interest-free student loans.

Although the federal government will make millions of subsidized Stafford student loans at the bargain interest rate of 4.6 percent this academic year, a few thousand lucky students will get even better deals—loans that charge no interest at all.

A handful of charities and colleges make student loans that only require the borrowers to repay the amount they borrowed—saving students thousands of dollars.

[Read about the pros and cons of interest-free loans.]

The organizations listed below offer interest-free loans to people of all faiths. While all students like to save money, observant Muslim students often feel extra pressure to find interest-free loans because Sharia prohibits the paying of interest. A few of the organizations, such as the Bill Raskob Foundation, make loans to students from across the nation. Most of the listed charities only make loans to people in their geographic areas, however.

Students seeking additional interest-free educational loans can also check with religious organizations such as the International Association of Hebrew Free Loans, ethnic societies and local community foundations. It also pays to ask your college’s financial aid officers and department chairs, since some colleges, such as Chapman University, and some college departments, such as Ohio State’s Civil Engineering program, offer a few interest-free loans.

Abe and Annie Seibel Foundation offers loans of up to $6,000 to about 800 Texas residents attending Texas colleges. The application deadline is February 28. The foundation has no website, but can be reached at (409) 770-5665.

Bill Raskob Foundation offers loans of up to $8,000 (but most range from $3,000 to $5,000) to about 60 sophomores, juniors, or seniors. The application deadline is April 1.

Central Scholarship Bureau of Maryland offers loans of up to $10,000 to about 150 Marylanders. The bureau requires each borrower to find an adult to cosign, or commit to repay, the loan. The application deadline is May 10.

Evalee C. Schwarz Charitable Trust for Education awards loans of up to $15,000 to students who have grades and scores in the top 10 percent, have Expected Family Contributions below $4,600, attend in-state schools and are not seeking law degrees. The application deadline is April 10.

Jewish Free Loan Association offers loans of up to $3,500 (although some specialized programs, such as nursing, have higher limits) to about 650 Los Angeles area residents of any faith. The association accepts applications throughout the year.

Leo S. Rowe Pan American Fund offers loans of up to $7,500 to about 70 upperclassmen who are citizens of Latin American or Carribean nations who want to study in the United States and return to their home countries. The fund accepts applications throughout the year.

Massachusetts No Interest Loan makes loans of up to $5,000 a year to undergraduates who are permanent residents of Massachusetts and attend Massachusetts colleges.

Military Officers Association of America Scholarship Fund offers loans of up to $5,500 to about 1,500 children of active or retired military who have a grade point average of at least 3.0. The application deadline is March 1.

Scholarship Foundation of St. Louis makes loans of up to $5,000 a year to about 600 low-income students in the St. Louis area. Deadlines are November 15 and April 15.

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Acquiring a good education may prove to be expensive for many youths today. Getting a student loan from banks or lending companies at the start or the middle of a study term is not unheard of. Here are a few useful facts on how to obtain such loans.

There are several ways in which fast loans can be obtained by a student. These include lending companies, public institutions such as banks, and even the government. The financial aid offered by the government is recognized by reputable banks or agencies. These federal and state government grants include Family Education Loan Programand they are the best type of loans for college students.

The advantages of applying for a government grant are evident in the name of the loan itself. As these are federal grants, the interest rates are low, there are no credit checks and a guarantor is required to oversee the academic performance of the borrower. However, qualifying for these grants is not straightforward, and the reason many borrowers look for private student loans.

At the start of the study year, you will need to pay the expensive fees such as tuition costs, university fees, and books. You can apply for private loans via lenders that offer a longer time period and low interest rate, but this may not be offered to you until the middle of the study term, whereas the federal grants are given at the start of the year. Most of these grants are secured as parents or guardians provide the security. In order to qualify, you need to show proof of good grades.

The other type of lending that is granted in the middle of the year is called a cash advance loan. It is suitable for covering accommodation costs, insurance, and other smaller expenditures. The application is processed and approved within a few hours. As it is unsecured, you only need one co-signor or guardian to qualify. However, bear in mind that the credit rating of the co-signor is very important as the interest rate (APR) depends on the credit report.

School-based financial aid is another form of helping students. Since the deadlines for this type of aid are often early, candidates should contact the office at his or her college to obtain the necessary paperwork. You can make an application for specific sponsorships that are offered to you by the school.

Before you make a decision on which type of student loan would be suitable for you, shop around for the best interest rates, repayment schedules and fees, unless you are applying for federal grants, where the interest rates are fixed. However private lenders do not offer this facility, so you should be very careful and find out about all the charges before signing on the dotted line. There are some lenders who will give discounts so make sure you ask how much you may be entitled to.

Getting a student loan does not have to be a difficult task. There will be a time when you will have to consolidate your borrowings, but until then, try to save as much as you can towards paying your debt off once you graduate from college. Right now, your present task should be to focus on which types of student loans best fit your circumstances.