Different Typs of Education Loans

Answer 1

The cost to finance college may come as a shock to some. The cost of tuition, as well as books, and room and board add up. The overall cost may be overwhelming. However, when you take advantage of education loans, the amount you pay up front may not be as substantial as what you would pay if you tried to finance your college career on your own.

Stafford Loans

Stafford loans are government issued loans. These loans are subsidized and unsubsidized. Subsidized loans are loans that are awarded based on the financial need of the student. These loans do not accrue interest while you are in school. Subsidized loans begin accruing interest once you start paying the money back. Loans that are considered unsubsidized begin accruing interest once you accept the money.

With both subsidized and unsubsidized loans, you can defer repayment for up to six months after you graduate from college. However, with unsubsidized loans, you may want to consider paying the interest on the loan each month while you are still in school to keep the money you own on the loan at a minimum.

Private Student Loans

One option for students who need more money for college is a private student loan. This type of loan is typically offered through various banks. Your APR and loan length are determined by the lender. Private student loans should be considered as financial resort only if Stafford loans, grants, or scholarships do not completely cover the cost of school.

State Loan Programs

One financial option many students do not take advantage of are state loan programs. 38 states currently offer student loan options. For more information on state loan programs, you should speak to a financial adviser at your college.

Paying for college does not mean you have to put yourself in a financial bind. Instead, you can use a variety of student loans to help put yourself through school. When you look at different education loans, look at the interest rate for each loan, as well as the loan length, and conditions. When you research your loans, you can end up saving yourself money.