An Overview Of Students Loans And The Types
An overview of students loans and the types
Loans are just a part of life for most students. Without applying for student loans, most of us could not go to school, complete a degree, and find a good job. In fact, more than two third of the students attending college today will need to apply for student loans. Luckily, many student loans offer relatively low-interest rates and borrower-friendly repayment options. However, limits do apply for loans, as there are limits to the amount you can borrow by loan type and only up to the cost of education.
Ensure that you don’t borrow more than your total education cost.
How can you start off applying for a student loan?
- The free application for federal student aid is also called the FAFSA.
What is a Stafford loan?
- These are offered directly to students.
- They can be used for different kinds of higher education.
- Stafford loans may either be subsidized or unsubsidized, based on your financial need when you apply for student loans.
- Subsidized loans mean that you do not need to pay any interest on the student loan you apply for while you are still in school.
- You begin accruing interest on the first day you receive your funding if your loan is unsubsidized.
- Parent loans for undergraduate students are offered to the parents of students by the United States Department of Education to help fund their child’s education.
- These loans are limited to the actual education expenses minus any other financial aid received by the student.
What are Perkins loans?
- These loans are available for both graduates and undergraduates.
- They’re guaranteed by the federal government but financed by your school.
- These loans are based on your financial needs.
What are the original terms?
It is an initial repayment schedule that was agreed upon:
- It is a 10-20 year plan
- There are income-based payments
- The initial agreement is modified to better suit your level of income; you will need it to be renewed every year as your income may change every year
What is deferment?
- Deferments are when payments cannot be made.
- A deferment does not get rid of payments, it simply delays them.
What are consolidation loans?
- These are meant for multiple, hard-to-manage payments
- They combine loans into one monthly payment
- they extend the length of the repayment plan
- Monthly payments are decreased
Which are the 10 best student loan refinance companies?
Here’s a list of the 10 best student loan refinance companies:
- Citizen bank
- College Ave
- CommonBond
- Connext
- Earnest
- Laurel road
- PenFed by Purefy
- SoFi
- Splash financial
- LendKey
When you are choosing an option for a student loan, ensure that you look at the interest rates. Even decimal points of difference can add up to huge amounts over the years. Also, the student loan debt does not automatically vanish or go away, even if you file bankruptcy! Only under very special situations, you will have these loans excused. One of these circumstances is death. You may actually be able to get your loans reduced or totally excused if you choose to work in the public sector.