Federal Student Loans

<!--[if lt IE 9]> <![endif]

Student Financial Aid, Federal Loans, Governmnet Loans, Stafford Loans, Subsidized Loans, Student Loan Payment, Perkins Loan

What are the different types of student loans?

There are different types of student loans that you can avail, here are some of them: Federal State Loans - The Federal Family Education Loan Program provides American families additional financial aid which is funded by the federal government. Students applying under this type of loan are automatically considered in the program. This type of student loan has a very low interest rate and flexible payment plans.

Federal Student Loans

A

The Perkins Loan

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.

B

The Stafford Loan

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.

C

The PLUS Loan

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.

Things You Need to Know About Federal Student Loans

Funding your education can be a daunting task for most of us. Unless you are born into a privileged family, finding money to further your academic goals may pose considerable challenge. One very popular way to fund your college education is by getting student loan. Yet with too many institutions offering loans of various kinds and with different rates, how do you select the best one for you? Why not consider Federal Student Loans? Getting to Know Federal Student Loans
What are actually federal Student Loans? Federal Student Loans or Direct Loans are part of the federal student aid administered by the UDS Department of Education. These are special loans not offered via private lenders or companies but they are made in agreement between the student and the US Department of Education. Those who wish to apply for a Federal Student Loan must fill in a Free Application for Federal Student Aid (or FAFSA) which can be done via the Internet. Just include all the necessary documentations and information required. Additionally, students must complete a Master Promissory Note (or MPN) which is actually a legal document that explains the contract between the related parties. All the terms and conditions of the loan are stated in clear terms in MPN as well. Getting the Loan
After successfully securing one of the loans, student may sign up and use the service center. By gaining access to this feature, they may view the loan amount and all related information. Plus, you may also opt to use the services of a counselor form a direct loan servicing site. . It is quite easy to qualify for the loan, you just have to be enrolled in a school that is eligible for the direct loan student loan. And you don't have to be a full-time student either, you can ask for a Federal loan or direct loan even when you are on a studying part time basis. The Most Common Types of Federal Loans
Generally, there are two most common types of federal loan or also referred to as Direct Loans:
The Subsidized Loan
The Federal Subsidized Student Loan has an interest paid subsidy that it lightens the burden of the student to manage. Now, Students don't have to worry about the interests as they are fully paid by the Government. That should be a reason to have greater peace of mind and to excel in the current academic pursuit.
Unsubsidized Stafford Loan
These are meant for graduate student who have families of their own to support, or if they have no living parent to support them. These are loans with low interest. There is a limit you can get with these kinds of loan and students can expect around $8,000 in total amount. Federal Student Loans do have a fixed interest which is determined every July 1st. There is a minimum fee incurred, which can be set up to 4%, which is used to offset the cost of managing the services of these programs.

Guaranteed Federal Student Loans

Most students need guidance when it comes to learning about financial aid. When you want to secure a Stafford Federal student loan, you must first file your FAFSA at the FAFSAonline.com website, since it will save you a lot of time. After filing the FAFSA you generally wait a few of weeks to receive your Student Aid Report. Then your school will send you a letter confirming your financial aid. This letter will detail how much aid the student is eligible for, and the form of aid that he or she will get.

With this award letter in hand, you can then get a promissory note that you have to sign. This promissory note will also contain the filing instructions. The Federal Stafford Loan is a low-interest federally guaranteed loan that students can avail of. These loans can either be subsidized or unsubsidized. For the time that you're in school and for six months after leaving school, the interest on subsidized loans is paid by the federal government. The interest on an unsubsidized federal student loan begins to accrue from the date of disbursement. The student may receive a subsidized loan as well as an unsubsidized loan during the same enrollment period.
Consolidation of federal student loans is also a possibility. This consolidation program is comprehensive and contains all the necessary information for figuring out how to take advantage of it. With federal student loan consolidations reaching unprecedented lows it has become advantageous to the student to receive federally guaranteed protection by using one of these programs.When you use one of the consolidation programs you're taking advantage of guaranteed protection offered by the federal government.
A good federal student loan program is the Federal PLUS loan that is a smart financial strategy that parents of students find useful. Apart from offering attractive terms, it enables you to meet your college obligations while paying below market interest rates. This type of federal loan is available any time of the year, offers single-digit interest rates, and you can fund 100% of your college expenses. The student may also eligible tax deduction of the interest with the whole process being on an instant-approval basis. Take advantage of any federal assistance that you can. It's tax dollars at work.

Private Student Loans

Private Student Loans - are usually offered by banking institutions such as Bank of America and Wells Fargo. This type of loan provides students to fill the difference between their tuition fee and the federal state loan grant. This type of loan requires the borrower and co-borrowers to have a good credit standing. This is to improve the financial standing of the student which he can use to buy books, computers and room and boarding expenses. Institutional Student Loans - usually offered by the university that you are enrolled in. You can contact your financial aid department for more information.

Key Benefits of Private Student Loans

Private student loans can be obtained at a faster pace, making it easy to get and with great flexibility. Read on to know how private student loans help students further their academic activities at ease. With the steady escalation of educational costs and as the number of applicants are on the rise for federal loans, private student loans have grown rapidly among college students. Many students find the private student loans to be fitting and obtained effortlessly for making college education expenses. Private student loans also known as alternative student loans are obtained from private financial organizations, banks, credit unions etc based on the credit worthiness of the applicant for repaying the money without the interference of the government within a short period. Private student loans also are frequently used in the combination with federal student loans, especially when the funds are not sufficient through the federal student loans to cover the full expenses towards education.

Private student loans can be availed of by students with good credit report, or when he is a regular employee or if he is permanent resident of US. To satisfy the these requirements, he can apply with a co-signer who meets the minimum eligibility criteria and avail the private student loan. Benefits of private student loans:

Private student loans can be obtained at a faster pace, making it easy to get and with great flexibility. The approval process is too quick in the case of private student loans that the funds are got by the student within five business working days after the application. The money, which can be availed of through private student loans, is much higher than the federal and scholarship funds. The private student loans can be availed any time by the student without any need to worry about application filing before closing dates. Many private student loans can be consolidated. These private student loans can be used to purchase a laptop, or towards educational expenses etc. A government student loan however, might be very restrictive in spending the money. There is no government intervention, as it is an agreement between the borrower and the private lender. Thus no need for government paperwork.

Although there are lots of advantages in getting a private student loan, no one can deny the disadvantages it has. Private student loans are only for credit worthy individuals, and mostly a co-borrower has to co-sign the loan document. Mostly the co-borrower is the parent. Also, the private student loans carry a hefty interest rate when compared with government student loans. Interest rates can vary each month, while government student loan interest rates are fixed. It requires applying for the loan several times as the applications are separate for each academic year in the case of private student loans.

Guidelines lenders look in for students' creditworthiness:
A good credit history for a minimum of 21 months should be there. The residence should not have been changed at least for one year's time. Should be a citizen of US or a permanent resident of US and should have resided for two years in US prior to permanent residentship. Should be able to provide proof of present revenue with an employment in the area where the student is attending school. Should have been in the job for at least 2 years, in case of self-employed should have been conducting business for at least 2 years time.

Learn everything you need to know about Student Financial Aid, Federal Loans, Governmnet Loans, Stafford Loans, Subsidized Loans, Student Loan Payment, Perkins Loan and more!

-->