Top Seven Facts About Student Loans
A lot of young people today are looking for best funding source for their tuition. Some of them are trying to qualify for grants, some for scholarships and other for student loans. There are top seven facts about student loans every potential borrower must know about. Being educated is the key in receiving college funding without problems and can become a turning point.
1. It’s better to apply for Federal student loans
The main strategy for wise funding is to apply first for federal financial aid. In fact, most specialist recommend to exhaust anything a student can from this source. The first step in applying for Federal student loans is to submit a Free Application for Federal Student Aid (FAFSA) online, by phone or by mail.
2. Federal loans are cheaper
The main advantage of loans through Federal Loan Program is that these loans are low-income. In fact this is the cheapest option available in comparison with private (alternative) loans.
3. Private loans are flexible
After applying for Federal loans it’s the best time to apply (if it’s necessary) for private loans. Private loans have advantages and disadvantages (as any other types of loans). The main benefit playing the most important role for borrowers is that alternative loans are flexible. It’s true especially in modern life where the level of competition grows and banks or other private lenders do all the best to offer top features at affordable price.
4. Alternative loans are more expensive
The fact that alternative loans are more expensive in comparison with federal loans can made some people upset. However private lenders offer various additional options like help centers, plenty of repayment plans, calculators and more.
5. No cosigner or credit history needed
Federal loans are based on the need of students. And they don’t care about financial situation and credit history. So if you have bad credit history and/or no cosigner – it’s not a problem. You will qualify.
6. Private loans are easier to apply for
In order to apply and successfully qualify for federal loans it’s necessary to invest a lot of time and efforts. From this point of view, it’s easier to qualify for private loans because banks are always open for eligible borrowers.
7. No bad credit history for private loans
Private lenders have strict requirements. And one of the main requirements to be eligible for is to have a good credit history or a credit worthy cosigner. Unfortunately sometimes these requirements can become a real obstacle for potential borrowers.
All types of loans including federal and private student aid options have advantages and disadvantages as any other thing in life. For example, private student loans have very nice features owing to huge competition among various lenders in this niche. So, it is good for borrowers.
However it’s better to consider federal loans as a primary funding source to focus on. There are several reasons for it. First, they are cheap ways of college funding because do offer the lowest interest rates. The second point to consider is that loans by the federal government are open for students with bad credit history or no cosigner.
Summing up, there are various types of student loans including private and federal, cheap and expensive. The best advice for students who are willing to pay rates is to choose federal student loans. Because these loans are cheap and are not requiring to have a cosigner.
Find out more information on guaranteed student loans without cosigner in our useful guide. Discover all details about federal student financial aid.
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