Student Loan Advice And Information

Student Loan Advice And Information

Student Loans

For many students,​ the​ dream of​ getting a​ higher education just isn’t possible without the​ financial aid of​ a​ student loan. Fortunately,​ there are many opportunities out there to​ apply for and receive a​ student loan. And even better,​ is​ here to​ give you​ all the​ knowledge you​ need to​ choose the​ best student loan for you.

Student loans generally come from two sources: the​ federal government and private financial institutions,​ such as​ banks. Both require repayment of​ the​ loan,​ but that’s where the​ similarities end. Let’s take a​ look at​ both federal and private student loans.

Federal student loans are sponsored by the​ government and account for the​ biggest chunk of​ education loans. There are three main federal loan programs: the​ Perkins Loan,​ the​ Stafford Loan,​ and the​ Parent Loan For Undergraduate Students,​ also known as​ PLUS.

The Perkins Loan is​ the​ most affordable student loan,​ with an​ interest rate of​ 5% and low fees. But it’s also the​ hardest to​ get because it’s only given to​ those who need it​ the​ most. And the​ loan limit,​ at​ $4000,​ is​ the​ lowest of​ all three federal student loans.

The Stafford Loan comes with a​ variable interest rate that’s higher than the​ Perkins,​ but lower than the​ PLUS Loan,​ due to​ the​ cap at​ 8.25%. as​ with the​ Perkins Loan,​ this student loan does not hold credit worthiness against the​ applicant. the​ Stafford Loan also has a​ much higher loan limit and is​ offered to​ both graduate and undergraduate students.

Compared to​ the​ Perkins and Stafford Student Loans,​ which are borrowed in​ the​ student’s name,​ the​ PLUS Loan is​ completely different in​ that it​ is​ a​ loan for parents of​ dependent undergraduate students. a​ big advantage of​ this type of​ student loan is​ that it​ covers any remaining balance not covered by other forms of​ aid – in​ essence the​ loan limit covers your entire educational expense.

Now that we’ve familiarized ourselves with the​ different types of​ federal student loans,​ let’s identify the​ attributes of​ a​ private student loan. This is​ a​ loan from a​ financial institution that takes into account your creditworthiness,​ not your need for aid. Your credit is​ reviewed by lenders and if​ approved,​ you​ can get a​ substantial size student loan in​ minutes,​ sometimes up to​ $30,​000. a​ downside to​ private student loans is​ that repayment terms typically cap at​ 15 years,​ compared to​ 30 years for a​ federal loan. Also,​ if​ you​ become disabled or​ deceased,​ your heirs are required to​ payoff your student loan,​ whereas in​ a​ federal loan,​ the​ loan is​ forgiven,​ making repayment unnecessary.

As you​ can see,​ you​ have several choices when it​ comes to​ student loans. Making sure you​ choose the​ best option is​ a​ matter of​ getting informed on​ these choices,​ and picking to​ student loan that best fits your needs.

Student Loan Advice And Information

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