Student loans can be quite complex as they have many variables. However, getting a student loan to fund your college education should not be too difficult even if you have bad credit rating; this is because most lenders (especially from the government) don't consider credit rating as a major factor for qualification. They assume that most applicants will be going to college straight from high school, and will not have a credit rating yet. Another reason is because student loans are treated as investment loans (you're investing in education for a better future).
There are many different types of student loans exist, it's good to have some knowledge about them before you're applying for one. Basically, there are two sources of student loans; either from a government or private lenders. Government student loans are usually preferable because they are subsidized and guaranteed by the U.S. government and have fixed interest rates that are usually lower than most private student loans.
To apply for a government student loan, you need to fill out the Free Application for Federal Student Aid (FAFSA). This form will calculate your ability to pay for college and determines the tuition amount you need. It basically evaluates your financial needs for such loan.
The four major types of government student loans are:
1. Stafford loan. This is the most popular type; it's funded and guaranteed by the federal government; it can be either subsidized or unsubsidized or a combination.
2. Perkins loan. This loan is the same as a Stafford loan but currently has lower fixed rate (5%). You have to demonstrate financial need to be awarded this loan.
3. Parent PLUS loan. As its name suggests, this loan is given to parents for funding their child's college education. The parent is the responsible party to pay back the loan. This loan usually has larger amount than the other types of loans.
4. Graduate PLUS Loan. This loan is like the Parent PLUS loan, but is given to graduate students only. If you are a full-time or half-time student attending a graduate program, you may be eligible for this type of loan.
All the loans above can be either subsidized or unsubsidized. With a subsidized loan, the government pays the interest on the loan while the student is attending school. With an unsubsidized loan the student is responsible for paying the interest.
For some people, student loans may be something they never have to deal with, but for those who are in financial need, a student loan can be one of the most important financial investments they ever make in their lifetime. We all know that a college degree can make a big difference when it comes to employment or professional careers. Most employers prefer to hire someone who has a college degree. Also, a college degree could give you higher bargaining power when it comes to negotiating your salary package.
If you want to understand more about student loans, go and download a FREE report: Unravelling The Different Types of Student Loans. You can also learn and explore other different types of loans at our sites.
Article Source: http://EzineArticles.com/?expert=Yvonne_Suzannah
Tuesday, July 29, 2008
Monday, July 28, 2008
Student Financial Aid Direct Loans and Your Future
Do you really want to pursue college, but you're running out of cash? Would you just let that dream die? Good news is the government, through the Education Department are offering programs to help one get through college. Student financial aid direct loans are an inexpensive and simple way of lending money to help them pay for college expenses like books, tuition fee, dorm fee and any other educational expenses. If you are planning to get a student loan from this program, try to check if your school recognizes it. Furthermore, if the school participates with this program, complete a form called a master promissory note. It would serve as a legal binding agreement between you and the Department.
You may choose from four repayment plans. Choose the plan that you consider would best suit you. They are standard, extended, graduated and income contingent payment scheme. Under the standard plan, the borrower will pay a fixed amount monthly until the loan is fully paid. This would be a good option if you can manage to have a higher monthly payment because it would allow you to repay the loan quicker. The extended plan the best plan for you if you plan to finish the loan in a shorter time.
You are allowed to pay for the loan for twenty five years with a lesser monthly payment than the standard plan. However, the longer you intend to pay for the loan the more the interest you will pay. There are two options under this plan: the fixed and the graduated. Under the fixed term, you will pay the same amount monthly as for the graduated payment you start with low pay but will increase every two years. The income contingent repayment is a very flexible plan that helps you get through your undue financial burden.
Your monthly payment is calculated based on the borrower's adjusted gross income which will include the spouse's if married, the size of the family and the total amount of the loan. The maximum repayment period for this plan is twenty five years. The last option you have is the graduated repayment plan. In here, you will start with a very low monthly payment but would increase every two years. You are given up to ten years to repay your loan under this type.
Student financial aid direct loans are offered to make your dream get through college come true. You can check on how to avail of this loan through the servicing sites. Even so, you need to go through an entrance and exit counseling before you can apply for the loan, or before it gets approved. The entrance counseling is a session that would provide you some advice that would help you manage your budget and college expenses. It is also designed to assist you understand your responsibilities a as borrower.
On the other hand, the exit counseling is required to borrowers prior to graduation or leaving the college. This would make you responsibilities as a direct loan borrower. Consequently, going to college need not a burden as long as you become a responsible borrower.
Peter Barlow is a finance specialist and has written many loan related articles to help people get the loan they need at the rates they want.
Learn where the best places are to borrow money which is a popular website that specializes in providing information on No Credit Check Loans.
Article Source: http://EzineArticles.com/?expert=Peter_Barlowe
You may choose from four repayment plans. Choose the plan that you consider would best suit you. They are standard, extended, graduated and income contingent payment scheme. Under the standard plan, the borrower will pay a fixed amount monthly until the loan is fully paid. This would be a good option if you can manage to have a higher monthly payment because it would allow you to repay the loan quicker. The extended plan the best plan for you if you plan to finish the loan in a shorter time.
You are allowed to pay for the loan for twenty five years with a lesser monthly payment than the standard plan. However, the longer you intend to pay for the loan the more the interest you will pay. There are two options under this plan: the fixed and the graduated. Under the fixed term, you will pay the same amount monthly as for the graduated payment you start with low pay but will increase every two years. The income contingent repayment is a very flexible plan that helps you get through your undue financial burden.
Your monthly payment is calculated based on the borrower's adjusted gross income which will include the spouse's if married, the size of the family and the total amount of the loan. The maximum repayment period for this plan is twenty five years. The last option you have is the graduated repayment plan. In here, you will start with a very low monthly payment but would increase every two years. You are given up to ten years to repay your loan under this type.
Student financial aid direct loans are offered to make your dream get through college come true. You can check on how to avail of this loan through the servicing sites. Even so, you need to go through an entrance and exit counseling before you can apply for the loan, or before it gets approved. The entrance counseling is a session that would provide you some advice that would help you manage your budget and college expenses. It is also designed to assist you understand your responsibilities a as borrower.
On the other hand, the exit counseling is required to borrowers prior to graduation or leaving the college. This would make you responsibilities as a direct loan borrower. Consequently, going to college need not a burden as long as you become a responsible borrower.
Peter Barlow is a finance specialist and has written many loan related articles to help people get the loan they need at the rates they want.
Learn where the best places are to borrow money which is a popular website that specializes in providing information on No Credit Check Loans.
Article Source: http://EzineArticles.com/?expert=Peter_Barlowe
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