When you finally decide that you are going to attend college, it really is not to soon to begin knowing about the distinctive kinds of resource options. The 2 main major types of student loan selections fall under the groups of private and federal loans. Each of those two loan groups, have a number of different types of loans to select from. It’s going to require some time, but it will likely be time well spent when you educate yourself on the differences concerning all the types of loans being presented within each groups.
The very first category of loans we will mention is the Federal loan programs being offered. Let’s start with the Stafford loan. To qualify for this loan your FAFSA application must verify that you have a financial need. This loan is obtained through a bank, but is subsidized by the federal government. With this loan you are giving time after you graduate to get a job, before you actually need to start paying the loan back.
The Perkins loan is another option that might be available to you.. This loan is available only to students that have a exceptional financial need. This loan’s low interest rates, makes it a very attractive loan and if you qualify for it should be your first choice of loans. Just like the Stafford loan, you have a grace period after graduation before you need to start payments.
The next type of loan we’ll cover is the Plus loan, and it is available not only to the student, but to the parent of the student also. The amount of the loans either the parent or the student will qualify for is based on family income. The interest rates for these loans, are reasonable, and these loans will allow you to continue to borrow every year to pay for the entire cost of the education.
The next group we’ll mention are Private student loans, and the terms of this type of loan are dependent on the lender. The problem with most of these loans, is they are given based on the students credit score, which most high school age students will not have much of a credit history. One type of private loan is called the Signature Student loan and even though it does not require physical collateral, if the student does not have good credit, they could require a cosigner with good credit. These loans should be the loans of last resort, and a student and their family should take advantage of any of the Federal loans or grants that they qualify for, before they apply for a Private loan.
There is one other type of loan I’ll mention in the article and that is the Career Training Loan through Sallie Mae, that is offered to only students attending a technical or trade school. While the loan is given based on credit history, it is also available for on line courses which makes it worth looking into. The money from this loan could be used for educational expenses other than tuition. Sallie Mae offers flexibly payment plans with no early payment penalties.
The most important thing to remember is that you should start early and research all the different loan options that might be available to you and your family. The cost of a higher education means that most students graduate with substantial debt, so it is important to get loans with the best available terms.
Before you looking to acquire a student loan you need to obtain precise the specifics of Federal Student Loan and Grants.