Student Loans - Do They Really Help?

By: Susan Walker

Student loans help to finance your college education and enable you to get the degree you wan to get to pursue your career. There are two types so of student , one is federal loans and the other is private loans. Student loans usually have a low interest rate so enable the student to use them for funding their education and in most cases you only have to start paying back the loan after you graduate.

Federal Stafford Loans are student loans offered by the government. They are regulated by the and you can get them directly from the government or from a bank or credit union. Depending on your financial requirement, you can choose either a subsidised federal Stafford loan or an unsubsidized Stafford loan.

Subsidised federal Stafford loan is a long-term loan with a low interest rate. The government will take the responsibility to pay for the interest on the loan, when the student is in school. Unsubsidised Stafford loans are also long-term loans available at a low-interest rate. They are best suited for students who need more finance than what they have already obtained through other forms of financial aid. Students who come under the category of independent students can apply for additional unsubsidised loans.

Federal Plus loans are another type of student loans which can be taken up by parents, whose children are attending college and the interest rate on such low is pretty low. The student can be either a part time or a full time graduate and loan repayment starts after the student graduates from college.

Federal Perkins Loans are loans available at very low interest rates, but it offers a relatively small loan amount compared to other student loans. You only have to pay interest after nine month from the day you graduate. However, any late payments on this loan will damage your credit ratings because these defaults are reported to the credit bureau.

Even if you do not qualify for a student loan, it does not matter. Student loans can also be obtained from banks and other financial institution and that to at low interest rates. However, one important thing you need o do is read carefully all the terms and conditions of the agreement before committing to it.

It is seen that sometime students take too many loans to fund their college education. In such a situation it is better to consolidate the loans and convert all individual loan amounts into a single loan amount which can be repaid using a lower interest rate. What's important to take into account when doing this the fact that student loan consolidation is a decision that can be taken only once and if you decide to take it and proceed with your decision, remember you cannot do this again.

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