Where to Get a School Loan

Not everybody 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 normally available to you for funding your education, you will have to borrow money to complete your education. There are fundamentally two type of school loan you can apply for, government and private.

Federal Lending options

The federal government provides numerous methods of funding your own education and finding additional finance through a federal government school loan is the first option you should look into. Some advantages of government loans over private loans include:
– They are available to all pupils
– They attract lower interest rates
– They generally have lengthier repayment periods
– They have options to defer/postpone payments

If you can demonstrate economic need you will be able to get a subsidized federal college loan where the government pays off the loan interest for the period you are in university and when your loan is within its grace period or in deferment. Your Economic Need is calculated as the Cost of Attendance minus Expected Family Factor.

To apply for a federal government student loan you will need to develop a Free Application For Student Aid, referred to as a FAFSA. Two typical federal student loans include:

i) Federal Perkins Loan

The Federal Perkins Loan is a low interest loan provided by your school with assistance from the government. Option of the Federal Perkins loan is based on your own financial need.

ii) Federal Stafford Loan

The Federal Stafford Loan is regarded as the common school loan that features a six-month repayment grace time period after leaving university. It is only awarded like a subsidized loan on the basis of economic need. The maximum amount you can borrow is dependent on your own school year, together with first year students receiving the lowest amounts.

Exclusive Loans

In many cases how much money available through federal government loans is not adequate to cover the full costs of gaining a whole education. This means you are forced to access additional money by taking out personal loans.

In general any private school loan you apply for will be an unsecured loan which means no property will be used because collateral to safe the loan and the loan will therefore carry increased interest rates.

Acceptance for just about any private school loan you apply for will be dependent on your credit score. The eye rate applied to your own loan will also be decided from your credit score.

One main advantage of a private college loan is that the money can be used for anything, but this does imply you need to exercise some financial discipline whenever you receive the money from a exclusive loan.

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