Understanding Student Loans

Students who opt for higher studies often find that they lack the required capital to fund their anticipated study program stretching perhaps to several years. Fortunately, there are many institutions that a student can turn to for assistance for financing his education program. Except in the case of grants and scholarships, all other loans taken have to be re-paid; and unfortunately this fact does not strike the borrower forcefully enough at the time of obtaining loans. The obvious reason for same is since many repayments start only on graduation; and due to a feeling of satisfaction for the time being at finding the funds to cover more and more of the direct education costs and other education related expenses 폰테크.

There is a cost attached to every loan that you take and it is very important that you educate yourself first on the types of loans available, which carry fixed as well as variable rates of interest during the lifetime of the loan. Even at fixed rates, the rates attached to different types of loans differ, as does the repayment periods, deferment options etc. It is also pertinent to visit websites of different lenders and do an in-depth study of the diverse packages on offer and / or negotiable, incorporating varying concessions on credit terms with regard to rate of interest, repayment period, deferment options etc; so that you can select the type and lender that best suits the circumstances on a case by case basis.

For purposes of college education, it is the Student Loans (except for limited Perkins Loans) that carry the most favorable all-round terms than any other general financial loans, and as such your search should mainly be confined to all types of student loans only.

1. Student Loans may be classified broadly under 2 categories:

(a) Federal Loans

Government sponsored loans executed via the Federal Family Education Loan Program (FFELP) and generally carry fixed, low interest rates; Perkins and Stafford Subsidized loans are need based while Stafford Unsubsidized and PLUS loans are not need based; but do not generally cover related costs of education such as tuition, books, computers, board and living expenses etc. Multiple options for re-payments and deferments may be available. Can be obtained through schools, banks and other student loans lending institutions

(b) Private Loans

Granted by private lenders and are obviously at higher interest rates than federal loans, but you do not have to show financial need for the amount of the loan and there is also no maximum limit, but have to show a good credit score. Deferment options may be obtainable (though at a price). Credit terms obtainable can be further improved by getting a good cosigner to support your loan application. A parent can apply on behalf of a student as a co-borrower to take advantage of his / her good credit score, but the responsibility for the loan lies with student as well as co-borrower parent.

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