BEST STUDENT LOANS: A BRIEF COMPARISON BETWEEN DIFFERENT POLICIES
Here are described all kinds of student loans so that you can choose the best one for you according to your needs and requirements.
First tell me what is the cost of tuition fees in many of the colleges nowadays?
There is no any fixed cost of your tuition fees. The tuition fee wholly depends upon the institution you choose, the program you want to take and the several other factors. The general estimation lies somewhere between $2,000 to $9,000 per year.
Is my residency fees included in my tuition fees?
No, if you are also searching for some residency, the fees may sometimes accounts to double. However in some government grant institution you may find hostels or residency options for you.
The fees are so costly for me? Is there any grants or loans schemes?
Yes, you can receive grants from many institutions. The grant will be given to you on the basis of your hard work and performance you show up during your college life. However, many deserving students will be participating for getting the grants. Unless you possess some sort of extra knowledge and talent, free grants are not your piece of cake.
Why do I need a student loan?
Student loans are one of the best ways to pay for college in this modern day and age where education is has become a basic requirement. Education is really important and your career and success in it depends upon getting your high school education from the best college possible. But studying in the best is never cheap and is very expensive. Students have options like grants, scholarships and personal savings which don’t need to be repaid. The only problem with these is they not enough to cover all the necessary college costs. This is where the need of student loan comes into play.
Student loans are indispensable for the general families today because of the sky high costs of college. There are various kinds of student loans. Depending on one’s needs, one can get their best student loans accordingly. On a very wide basis student loans can be divided into three categories: federal loans made by the government, federally guaranteed loans made by other agents and private loans. The first two categories have fixed rates set by the Congress while private loans have no such fixed interests. Every year a whopping amount of tens of billions of dollars is provided to American students, and hence the loan business has become an attention-grabbing business.
So, can you please show me the student loan options?
The America has given two very important loan options for their students.
- Federal student loans and
- Private student loans
What is federal student loan?
The loan scheme designed to provide American college students and their families with additional financial aid funded by the federal government are known as federal loans. Stafford Loans, Perkins Loans, and the Federal Consolidation Loan are included in the federal loans.
Perkins and PLUS
Perkins is another such federal loan provided on the basis of financial needs. Another type of federal loan is called PLUS or Parental Loan for Undergraduate Studies. The best way for every student is to participate in the direct loan program but it is only possible if the student attends a college that allows direct student loan program. Through PLUS, parents can take loan as much as the full cost of attendance of their children’s college.
What is private student loan?
The private loan are loan schemes funded by some banks or private institutions, which are especially designed to fulfill the gap and provide extra fund to you, in case the federal loans or grants don’t subsidize your needs. Bank of America, Chase, Wells Fargo etc. can provide you with private loans.
Which one is better? Federal or private?
Federal loans are obviously considered better due to their fixed and lower interest rates. They are administered by two ways: either by the government itself or other lenders. The federal loans administered by the government itself are the best and are further divided into other categories. Stafford is the most common among the federal government loans. Through Stafford a student can borrow $ 5,500 during the first year of their college, $ 6,500 in their second year and $ 7,500 in the later years of college; the total amount not exceeding $ 31,000. It is given without any preference to financial status. However, if you have dire financial needs you may get Stafford loan at a lower rate called subsidized Stafford loan.
Comparison between the 3 policies
The current interest on each loan is as following: 5 % for Perkins, 6.8 % for Stafford and 7.9 % for PLUS. But PLUS if taken from other lenders except the government has 8.5 % interest. These are actually the maximum rates but usually all lenders charge the maximum interest rate. These rates can be subsidized and hence can be available at lower rates too. However, these rates undergo a lot of variation and hence, you always need to verify the current rate.
Now talking about federal loans issued by other lenders, different lenders have different interest rates. So, it is good to shop around. There are different schemes for discounts and reductions if you qualify for certain requirements. However, the maximum interest rate is fixed by congress. These benefits are not much advertised by lenders and only 10% borrowers’ end up with the benefits. Hence, you better inquire about the benefits yourself.
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Private loans-Option if you don’t qualify for federal loans
If you don’t qualify for any of the above mentioned federal loans, the only options left with you are private loans. Different private loan provider offer different interest rates and hence, it is also important to search around for the best deal around. The rates are subject to constant fluctuation making it really difficult to guess the interest rate. Though the application process for private loans is much easier and shorter than the FAFSA process, it is still not a good deal as federal loans.
Please tell me the procedure to apply for student loans?
Applying is quite easy. Follow the given guidelines.
- Consult your college, institution or high school principle or senior manager.
- You can also go through student financial assistance office within your area or territory.
- Get an application form.
- Fill all the details in the form.
- It’s mandatory that you have been living in US for at least 12 months.
- You should have not completed your post- secondary education.
- You can also fill up the form online.
Give me some tips to get the Best Student Loan?
Supporting your education costs with the student loan is a wise step to take. Before you sign up with any such loan offers, you may have confusions to choose or get the best student loan that meets your need and desires. You may have seen many people getting bored with the bills and monthly due dates and don’t want the same situation to repeat in your case. Well, then you must consider the things provided below in order to assure you get the best deal!
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Take help of student loan consolidation
The best practice for student loan would be considering the student loan consolidation. Student loan consideration is something that combines all the student loans into one that, in result, makes the interest low much less. The most prominent way to get the best student consolidation rates depends upon the credit you have. The students having a FICO score over 660 can easily get lower student consolidation loan rates. Now, if a question hovers about your FICO and credit score, we will help you with that as well.
The most important thing in student consolidation loan rates is obviously your FICO and credit score and determining your scores can be as easy as looking stars up in the clear sky at nighttime. All you need to do is to Google search for the information you need for determining your financial status. After you follow the given instructions, you can know where you exactly stand in financial term. Student having FICO score under 600 will undergo a tough time getting a good student consolidation loan rate and other offers associated.
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Research Online
The next thing you can do to assure the perfect deal is research online. The internet is the most accepted resource for any kind of information. With online surfing, you can get the information you need according to your loan requirements. Take enough time to get informed even about a single detail about the process need to be taken into account. Spending few hours in the internet can save you from paying thousands of hard earned dollars in the name of interest rates and other clumsy charges.
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Make a Wise decision
Student loans are very popular among the career focused and hard-working students but only wise decision pays. No matter how much care you show for your studies but if that care is disturbed by the worry about the due dates and high interest rates, you cannot assure the desired degree on your portfolio. Thus, you should always be making due considerations and do enough research before signing up with any student loan.
How long will the government loan procedure take?
If you plan to go through private loans, it depends upon the institution rules and policies. But the governmental agencies may take you somewhere around four to six weeks for issuing your application. Online applications will be issued in lesser timeframe.
How will I get the loan? Will I get the entire sum at the beginning?
No. generally you will get your loan in two tires, one at the beginning of your school and the other at the beginning of your second term.
Can I apply student loans for more than one time?
Yes, it depends upon your interest. If you can show up to the lender that you can pay off the money after you complete your education, you can apply for loan every year.
When should I have to repay the loans?
You have to repay the loans after you complete your education or when you graduate. Generally you will be given 6 months’ time after you graduate.
Can I make payments before I graduate?
Yes, you can still make payments when you are in school in case you get a good job or you found another source to fund your education. This will lower your burden afterwards.
I received my loan, but due to some circumstances I couldn’t finish my studies? What will happen now?
It’s mandatory that you start making payments to your loan provider six months after you leave school, whether you complete your course or not. In this case you should immediately consult your loan provider.
Short conclusion from my side
So, you better grab up a FAFSA (Free Application for Federal Student Aid) online and get going. Understanding the terms and conditions of students loan is complex, and hence you need to be fully aware about them before you choose one. Looking up at their official websites is not enough; the language there is more complicated. You may also end up paying higher interests. So, you need to research well on this topic. And there is no best student loan for everybody. Depending on how much you need and what you qualify for, you can choose the best student loans for yourself. So, think about your scenario first and then initiate your student loan search. Also, be responsible with our finances so that you are able to repay the loan soon and easily.
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