Where to Get a School Loan
Few people has the resources to finance their education. If your parents are not in a position to aid, and if you have exhausted the different scholarships and grants usually available to you for funding your education, you need to borrow money to complete your own education. There are essentially two type of college loan you can apply for, government and private.
Federal Lending options
The federal government provides different methods of funding your own education and finding additional finance through a federal government school loan is the very first option you should check out. Some advantages of federal government loans over exclusive loans include:
– They are available to all students
– They appeal to lower interest rates
– They generally have longer repayment periods
– They have options to defer/postpone payments
If you can demonstrate economic need you will be able to acquire a subsidized federal college loan where the government pays off the loan interest for your period you are in school and when your loan is in its grace period of time or in deferment. Your Financial Need is calculated as the Cost of Attendance less Expected Family Contribution.
To apply for a federal student loan you will need to complete a Free Application For Student Aid, known as FAFSA. Two frequent federal student loans contain:
i) Federal Perkins Loan
The government Perkins Loan is a low interest loan provided by your school along with assistance from the government. Option of the Federal Perkins loan is based on your financial need.
2) Federal Stafford Loan
The Federal Stafford Loan is the most common school loan that features a six-month repayment grace period of time after leaving school. It is only awarded like a subsidized loan on the basis of economic need. The maximum amount you are able to borrow is dependent on your school year, along with first year students receiving the lowest amounts.
In many cases how much money available through federal government loans is not sufficient to cover the full expenses of gaining a whole education. This means you are forced to access additional funds by taking out private loans.
In general any kind of private school loan applying for will be a loan which means no resources will be used because collateral to secure the loan and the loan may therefore carry higher interest rates.
Acceptance for any private school loan you apply for will be determined by your credit score. The interest rate applied to your own loan will also be decided because of your credit score.
One main advantage of a private university loan is that the money can be used for anything at all, but this does imply you need to exercise a lot of financial discipline once you receive the money from a personal loan.