Finding the Educational Loans You Need Now

December 9, 2011 – 1:08 am

Attending school or college is an expensive endeavor to say the least. When you factor in the costs of tuition, textbooks, housing, transportation, lab fees, computer equipment and software, are just some of the expenses that you will face each year that you attend the college or university of your choice. Although government aid in the form of scholarships and grants is available to most students, there is still a wide gap of unmet need that is not totally covered by meager financial aid packages. That is when educational loans can be the most beneficial.

Pay For Expenses Now

An educational loan is meant to cover the expenses that you will incur while attending college that are unmet by your financial aid packages or part-time employment. An educational loan gives you the money you need today, usually with repayment terms that begin after a period of time has passed following graduation and receiving your final degree, or if you fall beneath at least half time enrollment. Some educational loans are credit based, and others require no credit check.

Different Loan Types

The first type of loan that you will probably consider is a federal Stafford loan. These types of loans can be either subsidized (meaning the government pays the interest until the loan enters repayment) or unsubsidized (meaning that interest accrues on the loan while you are still in school). The Stafford loan is granted in payment increments that coincide with your standing as a student, with juniors, seniors, and graduate students receiving larger amounts than freshmen and sophomore students. Determination of the amount of Stafford loan money you qualify for is made once annually, before the start of the academic year. Your Stafford loan will be divided into two payments, one for each semester.

Another loan, the Perkins loan, is a government loan that is partially funded by your school. Perkins loans are usually only granted once you have exhausted your Stafford loan limits, and can be quite difficult to get. Perkins loans cost less than Stafford loans in terms of interest.

For students who wish to borrow more money than the federal government educational loan limits, private Student Loans provide up to $50,000 per academic year in additional funding. A private student loan is a credit based loan, so having good credit will determine your eligibility. For students who have no credit, limited credit, or credit problems such as damaged credit ratings will generally be asked to apply with a creditworthy cosigner to receive a private student loan. A cosigner can be a parent, relative, or other individual who has established a good credit history and is willing to assume your private student loan payments if you fail to honor your loan agreement.

It is important for students to remember that most student loans, including those that are received from the federal government, must be repaid. Only in instances of proven total disability or death will a student loan be discharged without payment. If you fail to repay your student loans, your annual tax refund can be offset to repay the amount you have borrowed, and your future paychecks can be garnished until the amount you owe is collected in full.

Save Online

Online lenders often offer lots of choices when it comes to private student loans. Online lenders also service these loans at interest rates that are comparable to those of the federal government educational loans, and also have better approval rates.


Tags: , ,

Sorry, comments for this entry are closed at this time.