Just like all other areas of finance in your life, you must also carefully control Direct Loan financing. There are many things to keep in mind such as yearly lending limits. For first year you can only borrow $2,625, $3,500 second year and $5,500 each year after that. This means you may also have to work or find other sources of funding while in school. Keep careful records of all money you receive and keep receipts for everything you spend money on. You might be surprised at what all can be used as a tax deduction.

As you can see Direct Loans are a fast and efficient way to receive college funding from government. The application process has been reduced to basically one form, time it takes to gain approval is faster and you receive your money sooner than before. Direct Loans are a welcome overhaul of generally failing old system of student lending.

Other alternative interest rates can be tried to get optimum method of charging interest. The other methods commonly utilized are as follows:

•Variable interest rate It is vicissitudes presented by a variable rate that leads to people going for a fixed rate mortgage. These are desirable till interest rates are falling. Once interest rates start ascending they become a menace.

•Capped rate A capped rate combines good points of both fixed rate and variable rate mortgage. The interest rate is allowed to fall freely, but not allowed to rise above a particular level. This means that borrower is assured that he will always pay a lower amount. But period of capped rate is limited. The normal period for which rate is capped ranges from 1 to 5 years. •Discount rate A discounted rate is a cut-off allowed by lender during a small period. This is normally allowed in case of first time buyer mortgages. The first time buyer is not burdened with excessive repayments from day one. The borrower can get mortgage refinanced after completion of discount period to avoid paying higher rates. •Tracker rate While lenders assure that they will incorporate any changes in interest rate right from time it is effected, they seldom do. This means that till your lender incorporates downfall in interest rates, you have lost several pounds. A tracker rate is linked directly to base rate and helps to save in case interest rates fall.

Thus next time you plan to take a mortgage, take stock of various interest options available. You don’t have to stick to variable interest rate. Neither is fixed rate only option available to you. Capped rate, discounted rates and tracker rates can also be taken to suit situation one is in.