Education, beyond that offered by public school systems can be a bit expensive. As a result, most students might need some amount of external funding to further their higher education plans. Grants and scholarships may help cover a part of the expenses, but then that privilege is available only for a cream of students.
Not everybody qualifies for grants and scholarships. student loans help to solve this in congruence by offering a level playing field for all the student classes. A variety of student loans exists both federal and private and for a prospective student, it is just about finding a scheme that best suits their requirements and expenses.
Student Loans, as mentioned already, are either federal or state funded, or those offered by private parties and non-profit private institutions. Starting with the former, the Federal Student Aid or FAFSA can be applied online, and the process is quite easy as well.
Another thing to consider is that the applicant must provide accurate and genuine information while filling out the application. Also, it is advisable to apply for Federal student aid as early as possible, after January 1st.
Another useful federal financial aid package is the Federal Parents Loan for Undergraduate Students or PLUS that considers the good credit ratings of the parents in exchange of financial help for their children.
These low interest loans cover everything from tuition fees and books to housing, library, and supplies. PLUS also can be applied online by filling out the necessary formalities.
Private student loans, on the other hand, are offered by private banks or other financial institutions, and do not have any federal government involvement in the entire process. This type of loans are issued for both undergraduate and graduate students and most avail them to cover the expenses that cannot be otherwise paid by federal aids.
But, unlike federal student loans, where the applicant can know before hand if they qualify for the loan, private student loans do not offer any prior hints and the final approval is solely based on the credit review of the applicant or applicants parents by the lender. If the credit rating of the applicant is not acceptable for the bank, they will reject the application then and there.
One more aspect about private student loans is that it is issued in a first come, first served basis, unlike the federal student loans that is given away on applicants needs. So, if you are planning to apply for a private student loan, start reasonably early.
The best place to look for private student loans is the web. There are many private banks out there offering student loan schemes, hence, it is advisable that a prospective applicant may perform some research and comparison game before choosing the one scheme that suits his her needs requirements fully.
Taking references from previous borrowers is also a good option. Finally, before submitting the application, make it a point to read the fine print thoroughly. This helps solve a lot of technical problems that could arise at a later stage.
When deciding upon a loan its important to understand the difference between types of interest rate repayments. There are two specific types of repayment options and its important to factor these into your final payment schedule.
Subsidized loans are loans which generally have some or all of the interest paid by someone other than the borrower. This type of loan is generally used whilst the student is still in school. Examples of this type of loan would include the Subsidized Stafford Loan and Perkins Loan.
Unsubsidized Loans are loans which accrue interest from the day that the loan is disbursed to the borrower (or their school). Although the loan may be completely deferred (Example: you dont make payments for a period of time) and you may not be currently making payments the interest will still be accruing on the loan amount. Examples of unsubsidized loans include the Unsubsidized Stafford Loan, Parent PLUS Loan, private alternative student loans, and student loan consolidations.
You will need to make the decision as to which repayment schedule you make at the disbursement point of the loan. I would always counsel that it is better to struggle and slowly pay off the loan interest rather than deferring all payments until graduation. Often graduates are forced into bankruptcy due to deferred student loans.
Ultimately, you have a lot of research to complete before diving into the application stage. Do take your time and establish exactly what you are seeking as it makes it all the easier when dealing with the respective loan companies.
About Student Loans:
Today being a brilliant student is not enough, there are so many educational expenses attached with a regular college degree, that it has become increasingly important for students to get either government assistance or look for a private student loan. If you are however someone gifted with exceptional IQ, then there is no stopping you. You will either get a scholarship or you might end up receiving government aid, however not everyone is a genius, and this means that to fund your own education you have to apply for government funding, or you can apply for a private student loan.
Advantages of a private student loan
A privates student loan is as the name suggests a private loan, it is a loan that has nothing to do with the government, and in essence is an agreement between you and a private loan firm. The advantages are many fold, the first thing that goes in your favor is that unlike a government student loan that has restrictions on the type of expenditures you can make, there are no such restrictions on you in a private student loan. For example if you want to buy a laptop for personal use, a government loan may or may not fund such an expense, however there is no such restriction with a private student loan.
There are also other vital benefits to a student loan, just like a government student loan, a private loan also requires you to pay the loan after you have completed your education, in addition a private student loan does not require you to apply via the college administration. A private student loan gives a student direct access to funds, and is much faster. As a matter of fact, private loans are designed to cater to all kinds of student expenses, this makes them a viable option for people who are not completely sure by how much their budget might get stretched.
Another factor in favor of private student loans, is that a private student loan usually offers a higher sum of money to students. A private student loan can be around $30,000 a year, and if required the student can apply for a loan of up to $40,000. This is beneficial to students that are enrolled in college courses that require larger sums of money in terms of tuition fees, and equipment. As mentioned earlier the biggest factor in favor of a private loan is that its fast, has a more flexible way of working, and is free from any government intervention. Government student loans are notorious for being restrictive, something private student loans are not.
Disadvantages of a private student loan
There is very important aspect of private student loans that most students tend to overlook, since a private student loan is a kind of an unsecured loan, the interest is higher than a regular loan, in fact the reason why some students go for a government student loan, is because the rate of interest of government student loans is much lower than that of a private student loan. If you feel that you have poor credit rating, or you want to save money, then a government student loan should not be considered as the first option, as a government student loan is regulated by the government and is intended to aid students. Whereas a private student loan, is a private company that is interested in making money from interest etc., so there are some financial benefits that they rightly have in mind.
If you are considering a student loan, and are a little apprehensive about a government student loan, or feel that you require more flexibility, then a private student loan is a viable option, and should allow you to utilise your funds more freely, with fewer restrictions. However there is one major drawback, unlike government student loans, the student needs to have a good credit history, and in most cases a co-signer is also required; hence not all students are eligible for private student loans.
- Direct Loans for Students
- Direct Loans are loans made with federal capital and owned by the federal government. Loan repayments are made to the government. Direct Loans are fully integrated with the federal financial aid process, simplifying the administration and oversight of government funds. Department of Education to achieve continuous improvement in student loan delivery. Direct loans are always
- Federal Student Loans
- Federal student loans are easier to pay and brings less long term hassle and panic if these debts are converted into Federal Student Loan Consolidation. Consolidating your loan means that all the different types of student loans you acquired will be combined in one loan 1- Getting a student loan consolidation will save you a lot
- Student credit card
- Student credit card Student credit cards For students, the student credit cards are the best way to enter the fascinating world of credit cards. Student credit cards help the students in taking advantage of the various benefits associated with credit cards in general e.g. convenience, safety, rebates etc., much earlier in their life. Moreover, student credit cards
- Student Loan Consolidation
- The following is a basic list of student loans that are eligible to be consolidated. Student loan consolidation centers should have these common options, and also listed is the advantages of loan consolidation. These are the things to look in to: 1. SS – Subsidized Federal Stafford Loans & Guaranteed student loans (GSL) 2. DSS – Direct Subsidized
- Credit Cards For High School Students
- Students in high school that are looking to start building their credit early can get high school student credit cards. These credits cards can help teach high school students responsibility, and how to manage their credit at an early age. These types of credit cards are issued to high school students, with a
