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Student Loans for College – 10 Things You Should Know About Student Loans

admin — Sun, 27 Jun 2010 19:57:11 +0000

Student loans mean a lot for college students because their future depends on the money that will be given to them. Going to college is getting more and more expensive every school year which is why student loans are important to students and parents as well. So, if you are thinking about college or student loans in particular, here are some tips and guidelines that would put your college life in perspective.

1. Collect figures

Collect figures mean that you should now look at how much money is needed in order to pay for your education. This means that you should have at least an idea how much is the cost of the tuition and fees of your desired course. Aside from that, you should be able to have an estimate of other expenses like travel costs, college text books, room and board, college tuition, personal expenses, and other things.

2. Research about student loans

If you already have the information mentioned above, then the next step to take is to look for a student loan that is right for you. All student loans are not the same because not all payment plans are suitable for all. Gather as much information as you can so that you can choose from the options available for you.

3. Types of student loan

There are five types of loans available for student expenses: subsidized (based on financial need, and the government will subsidize the interest charges until education is completed), unsubsidized (no financial need, interest accrual starts immediately), direct PLUS loans (Parent Loan to Undergraduate Student), private loans, and home equity loans.

4. Differentiate and compare student loans

Each of the student loans is at least slightly different. Compare and contrast the types of student loans so that you can narrow down your decision process. They are different in terms of payment terms, grace period, or penalties.

5. Financial Need Student Loans

This type of student loan has a low interest rate and is from the federal government for students with financial need. The interest rate in this type of loan doesn’t begin until the student has begun repayment of the amount thus making it easier and cheap if compared with other student loans.

6. Non-Financial Need Student Loans

This is quite similar to the financial need student loan, the only difference is that it is not based on the financial need of the family and the interest rate starts while the student is still in school.

7. Federal PLUS (Parent Loan for Undergraduate Students)

This type of student loan is not based on the financial needs of the student. The parents of the child could apply for this type of student loan. It also doesn’t consider the family’s income or asset when applying for a student loan. The amount of eligibility is based on the educational expense minus other loans, grants and scholarships t he student qualifies for.

8. Private Loans

The ones that are offering this type of loans are usually companies, banks, and financial institutions. These firms provide private student loans for both undergraduate and graduate students. The interest rates in this type of loan are actually high so it is not really recommended for students to choose this type of loan.

9. Home Equity Loans and Lines Of Credit

In this type of student loan, a home equity loan or line of credit is the way homeowners pay for your college education. One possible advantage here is a tax deductible interest.

10. Choose and manage well

From the different types of student loans mentioned above, choose one or more that is suitable for your needs and your budget. Be sure that once you have chosen the type of student loan that you like, you could actually manage it well and handle the problems that comes along the way.

Student loans were made for two reasons. One is to help the student financially in their quest for higher education, and the other reason is to help them be mature individuals. By having student loans, a student is able to face responsibilities which are really essential once that they step beyond their learning years into everyday life.

Remember though that these loans do eventually have to be paid back, after graduation if not sooner.

By: Dennis Becker

Which Student Loan is Right for YOU

admin — Mon, 24 May 2010 07:12:51 +0000

Life is made from decisions, some small and inconsequential, others you may look back on and think… “That was a turning point in my life”. To make a good decision about student loans (a very important decision), requires research and planning.

For the purpose of this article, we’ll assume you have already looked into grants and scholarships, if not, PLEASE do so, since that money does not have to paid back, while student loans are just that… a loan and at some point in time, the money will have to be returned.

Assuming you’ve decided you do need a loan, where do you look? The first place should be federal student loans. They are easier to obtain, interest rates are lower, and they are long term loans created with education in mind.

STUDENT LOAN FACT: The first payment on your loan is due six months and 45 days after graduation.

With that in mind, let’s look at the Federal Perkins Loan in more detail. This loan is based on need and that need is determined by information submitted on the FAFSA (The official document used by colleges and universities to determine eligibility for Federal Student Aid). Undergrads can borrow up to $4,000 per year, which is increased to $6,000 per year for grad students.

Next in line is the Federal Stafford Loan which is available to both undergrads and grad students. These loans vary depending on your year of education and current financial situation. Details can be obtained at your college or university financial aid office.

Your Stafford loan can be subsidized or unsubsidized. The difference is simple; with subsidized loans the government pays your interest, while you are responsible for interest payments on unsubsidized loans. Your financial needs and a conversation with your financial aid office, will determine which you are eligible for.

Next on the agenda is where your parents come into the mix, it’s called the Federal PLUS Loan (Parent Loan for Undergraduate Students). This is a low cost loan allowing your parents to borrow the amount of money needed for attendance, less other loans, grants and scholarships, already in effect.

While still a government backed loan, this one is a more traditional and requires a credit check, and is not based on financial needs.

Federal loans were designed to be used; if you qualify (and most will) then these are better and easier to obtain than private loans.

FEDERAL STUDENT LOAN FACT: Under certain situations federal loan re-payments can be deferred for up to three years while you are searching for a job.

Private loans are between the individual and the lending institution. These loans are designed to fill the gaps not met with Federal loans. They are be available from banks, possibly your school and organizations created specifically for private student loans.

When looking at these loans remember… your credit will be examined and loan terms will vary; be certain to shop the lenders for their best rates and on your end, protect your credit rating.

FEDERAL AND PRIVATE LOAN THOUGHT: Be conservative, don’t borrow more than you need; and remember that unlike a grant, this money DOES have to be repaid.

Continuing your education and obtaining a degree or advanced degree is the single greatest decision you’ll make. Abraham Lincoln said “Give me six hours to chop down a tree and I will spend the first four sharpening the axe”. Your education is YOU sharpening that axe, the axe that can cut through the adversities of life. Money should not be something that stops you from obtaining your education, and with student loans, it no longer should.

By: Alan King

Student Loan – Pros And Cons Of Student Loan

admin — Mon, 10 May 2010 17:02:53 +0000

Getting into a university is an expensive deal. Today, education comes at a cost. So, every year, more and more students approach banks for loan and pass out.

With the increasing number of students and fees, more loans are taken every year. Sometimes this goes beyond expectation. Students are passing out with a debt.

The one solution to the above problem is to get the same loan amount from your parents. This is called ‘Parent Loan’ now days.

Now, the question is which option one should go for.
Well, both the loans have their own advantages and disadvantages.
Federal loans are the best choice for students today as they give loans in a very lower rate of interest.

Even if you can not qualify for a loan, you can qualify for federal loan.

One good way is to get the financial help from your parents when you need it. When it comes to repay the loan after graduation and you find unable to repay some installment, you can take some help from your parents.

Federal loans offers parent loan at a very lower interest rate.
These loans are called plus loans.
A notable difference in plus loans and student loan is that first payment of the loan starts after 60 days after the loan is granted.

The term and condition for both the types of loans are same. However, the repayment period is negotiable.
Deciding the type of loan depends upon an individual.

And you should ask yourself if you are ready to take responsibility.

By: Sumit Bhatnagar