List Of Various Types of Student Loans
Now that you made the decision a higher education is certainly in your future, it’s time to start looking into just how your planning to afford it. When searching for student loans you are likely to discover both government loans along with private loan programs. Equally the Federal as well as private loans provide different options or different types of loans. It will be best for you to spend some time to understand regarding each different loan option, so you structure that loan that is most effective for you long-term.
First I am going to look at the federal student loan possibilities which are readily available. Let’s start with the Stafford loan. To qualify for this loan your FAFSA application must verify that you have a financial need. This loan is obtained through a bank, but is subsidized by the federal government. With this loan you are giving time after you graduate to get a job, before you actually need to start paying the loan back.
The 2nd federal loan we’ll talk about is the Perkins loan. This loan is available only to students that have a exceptional financial need. What makes this loan one of the best to qualify for, is the fact that it is a low interest loan. Just like the Stafford loan, you have a grace period after graduation before you need to start payments.
This next loan is called the Plus loan, and both the parent and the student can qualify for educational money under this loan. The amount of the loans either the parent or the student will qualify for is based on family income. Because these loans are available to both the parent and the student at low interest rates, they allow the family to contribute to the burden of paying for the child’s education.
The next group we’ll mention are Private student loans, and the terms of this type of loan are dependent on the lender. The problem with most of these loans, is they are given based on the students credit score, which most high school age students will not have much of a credit history. The signature student loan is available to those students with good credit or those with less than a good credit score may still qualify with a qualified cosigner. These loans should be the loans of last resort, and a student and their family should take advantage of any of the Federal loans or grants that they qualify for, before they apply for a Private loan.
If you are thinking about going to a tech or trades school, you could qualify for the Career Training Loan that is avalable from Sallie Mae. While the loan is given based on credit history, it is also available for on line courses which makes it worth looking into. You can also use the funds from this loan to pay for other educational expenses other than tuition. Sallie Mae offers flexibly payment plans with no early payment penalties.
The most important thing to remember is that you should start early and research all the different loan options that might be available to you and your family. The cost of a higher education means that most students graduate with substantial debt, so it is important to get loans with the best available terms.