Attending college is a milestone, but can also be extremely expensive. With many options already in mind, you should look at the student loan alternatives that are offered to a college undergraduate. Student loans are often very tricky, and are very confusing to most. In many situations, individuals are accepted for all different kind of loans and then are left in the dark when it's time to repay it or do not realize that they owe as much due to accrued interest. With high interest rates and very unforgiving payment plans, it is best to really know what options are available to you prior to being seduced by college lenders with promises of fast money.
You may already be somewhat familiar with the terms 'Federal Student Loan' and 'Private Student Loan'; these are the two most popular type student loans being utilized today. Do not allow the terms to deceive you, as they don't sound completely different, they have completely different stipulations and payment approaches when it comes time to pay the money back. A student loan is anything that is aided to the student or their family from the government or school the student plans to attend. These loans the student will pay back with interest at a later stage.
A federal education loan is a specific type of loan that is aided to the student from the federal government; this enables the student to loan what the student needs financially. There is no need to pay the money back until the student has graduated from college or has otherwise chose to stop attending school. This loan can be used for books, transportation, moving costs, or a number of other scholastic needs. When applying for this loan the student may even find out they are entitled to grants that they were previously unacquainted with. There are a number of different lenders that would certainly try to provide a loan. This is done to make money off interest and fees. It is the student's job is to weed out bad loans and discover federal student loan providers that do not charge outrageous rates of interest. Federal student loans are usually the smaller loan amounts given to and they usually have a more relaxed repayment plan.
A private student loan is a much more popular loan because these loan out much higher lump sums. This loan is given to the student if they qualify after applying (to the lender of their choice). The money requested is normally given to undergraduates in a large check but tend to contain hidden charges and exorbitant fees to pay back. Generally, 3% to 4% in fees is equivalent to 1% interest rate. A private student loan is more difficult to get and has more difficult repayment terms. The only reason a student need to try for a private student loan is if they have maxed out the federal student loan amount and have no other alternatives.
Due to understanding the difference between a federal and private student loan, students can better prepare themselves for the eventual repayment terms ahead of time and fully focus on their college experience.
You may already be somewhat familiar with the terms 'Federal Student Loan' and 'Private Student Loan'; these are the two most popular type student loans being utilized today. Do not allow the terms to deceive you, as they don't sound completely different, they have completely different stipulations and payment approaches when it comes time to pay the money back. A student loan is anything that is aided to the student or their family from the government or school the student plans to attend. These loans the student will pay back with interest at a later stage.
A federal education loan is a specific type of loan that is aided to the student from the federal government; this enables the student to loan what the student needs financially. There is no need to pay the money back until the student has graduated from college or has otherwise chose to stop attending school. This loan can be used for books, transportation, moving costs, or a number of other scholastic needs. When applying for this loan the student may even find out they are entitled to grants that they were previously unacquainted with. There are a number of different lenders that would certainly try to provide a loan. This is done to make money off interest and fees. It is the student's job is to weed out bad loans and discover federal student loan providers that do not charge outrageous rates of interest. Federal student loans are usually the smaller loan amounts given to and they usually have a more relaxed repayment plan.
A private student loan is a much more popular loan because these loan out much higher lump sums. This loan is given to the student if they qualify after applying (to the lender of their choice). The money requested is normally given to undergraduates in a large check but tend to contain hidden charges and exorbitant fees to pay back. Generally, 3% to 4% in fees is equivalent to 1% interest rate. A private student loan is more difficult to get and has more difficult repayment terms. The only reason a student need to try for a private student loan is if they have maxed out the federal student loan amount and have no other alternatives.
Due to understanding the difference between a federal and private student loan, students can better prepare themselves for the eventual repayment terms ahead of time and fully focus on their college experience.
About the Author:
Michael Saunders is an editor of TopGovernmentGrants.com. He maintains Websites providing resources on grants for small business and philanthropy giving.
