Choosing Government Student Loans
Advantages of the Student Loan
To pay for a college student’s education expenses like tuition fees, books, and others; one must avail of a money lending system called the student loan. The student loan is very different from the typical money lending system because its interest rate is notably lowered and the student is not obliged to pay until he or she is finished studying.
The most important aspect of many college education is the student loan. Especially to those who are financially incapable of studying in college because it allows students to pay their debts later after they graduated. This is particularly true these days because of high tuition rates and expensive living cost linked with it. A college student can easily pay his or her miscellaneous fees, lodging, food, extracurricular activities and other school related matters with the student loan.
Despite that, not everyone is qualified for a student loan. In order to be decided if you are qualified for the student loan, some qualifications should be considered such as income level, parent’s income level, socioeconomic status, among others. Of course, students who have the capacity to pay the tuition should not avail the student loan since there are more deserving people who needs the money.
There are basically two types of student loans: the student loan that is sponsored by the government and the private student loan. While previously mentioned student loan is supported by the tax payer’s money, on the other hand the latter is sponsored by private financial institutions. The interest rate of the loan is usually around 2% lower than the current market rate for traditional loans. Typically, a student must pay the student loan after 6-12 months of leaving school regardless if they finished their degree or not.
It is highly advisable to assess the institution where you are planning to borrow money because there are so many other choices of lenders. It is also very advisable if you start studying the payment scheme of the loan because it will help you avoid tight situations in the future.
Availing Government Student Loans
One of the most common type of student loan for tertiary education is the government student loan. These loans offer very low interest rates because it’s main objective is to help out people get higher education. These loans can serve a lot of purpose; it can finance tuition, books and school supplies, dormitory expenses, etc. Government student loans can be even paid after 6 months after graduation, wherein the borrower is probably employed in a stable company.
Government student loans are different from private student loans because these loans are federal in nature, meaning the government subsidizes these loans. As a result, interest payments are taken care of by the government while you concentrate on your studies. They have flexi-payment scheme that allows you to adjust on your first job before paying them. However, this kind of loans can be availed only through schools that participate in government aid programs.
In addition to that, government student loans doesn’t usually look at your credit rating for you to qualify a student loan, unlike private student loans. But you have to meet certain qualifications for socioeconomic status and the income of you and your parents. The goals of government student loans are to provide financial assistance for people who cannot afford to pay their higher education. Another limitation of government student loans is that it has a lower cap limit than private student loans. If one is eligible for government student loans, try to avail of it first and if one still have insufficient funds, then the next option is a private student loan.
In the United States, the federal government gives out several types of government student loans. The Stafford Loans, Perkins Loans, PLUS Loans and the Federal Consolidation Loans are examples of government student loans. You can also borrow directly from the Department of Education through the Federal Family Education Loan Program or FFELP. Government student loans require the borrower to fill up application forms such as the Free Application for Federal Student Aid or FAFSA so your name can be added to those being deliberated.
Debts Management: Student Loans Consolidation
It might be necessary for you to avail of a loan especially if you have dreams of becoming a successful doctor, lawyer or entrepreneur. A lot of students bury themselves in debts even after college because they keep on availing student loans leaving them bankrupt even before starting out in their chosen fields. They boxed themselves in a wall so they become desperate and instead of looking for better opportunities, they grab the first job available to them to pay their debts. They never realize that there is still hope on the horizon through a student loans consolidation.
When a student or graduate, combines all his loan into one, it is called a student loans consolidation. They use the new loan to retire old debts. This is debt management wherein the borrower pays all his debt through one new loan given to him or her by a single lender. The lender often gives out this kind of loan with a fixed interest rate. Paying student loans will be a breeze because it removes the possibility of confusion due to multiple payments and multiple lenders. With this process there is a huge guarantee that students and fresh graduates will save thousands of dollars because it will reduce their monthly payment rate and they can even get a fixed interest rate. Plus, student loans consolidation offers flexible payment schemes and do away with extra charges and penalties.
It is excellent to procure a student loans consolidation if one has more than one loan in various agencies and companies. Consolidation is the answer, a golden opportunity to get out of the quicksand one is sinking into. One does not need to work like a horse, just plan smartly through student loans consolidation and one can afford to be financially stable at the same time debt-free. This would help in financial planning by unifying all debts into one.
In the Internet and various financial companies, there are many different types of consolidation programs being offered at lower rates.
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