Description: The article introduces the details about different types of college ave student loans, we will be provided the materials on the differences among the loans, positive and negative aspects of the loans and some suggestions for us to choose the right loan.
I’m going to show you different types of student loans and what all they entail. I’m also going to be giving you some pros and cons and choosing the right student loan for you.
There are two types of loans that you can get, there are federal loans and private loans, these two categories come with an arrangement of different subcategories that follow them.
The first one that we’re going to talk about is the federal loans, these are the loans supplied to you by the government, there are six types of federal student loans, the first one’s going to be your direct subsidized student loan, this one’s for undergraduate students who demonstrate some financial needs, so go online, fill out your FAFSA and they’ll tell you how much money that you qualify for and your interest will be paid during school and you won’t have any interest after schoo. This is your subsidized loan meaning your interest is going to be paid.
The next student loan is going to be your direct unsubsidized loan now, for this one, you don’t have to demonstrate any financial need, you must be an undergraduate student, but your interests will not be paid, so you will have to pay interest at the end of the day, you won’t have to pay interest during school.
If you choose not to, but when it comes to paying your loans back, you will have to pay interest in, so the direct subsidized and unsubsidized loans are probably the ones that you will hear, they’re probably the most common ones, it says you need to demonstrate some financial need for the subsidized loan.
I have to see anybody turned down for a student loan, so if you’re reaching out to try to get that subsidized interest paid loan, don’t go to the FAFSA website.
The next one is going to be the Direct PLUS loan, the first two were for undergraduate students this one is for a graduate or a professional, the only difference between this one is that you have to have good credit to get it, if you pay it back and they figure out the cost for you, with your subsidized and your unsubsidized loans.
They’re going to take the cost of attendance subtracted by any other student financial aid that you have and that’s the amount of money that you’re going to get, so if you don’t truly have a reason to do the Direct PLUS loan, you’re probably not going to qualify for it. If you need five dollars, you’re not going to qualify for it.
The next one is going to be your direct consolidation, this one is not much of a loan per se, but in a way of repaying your loans back, when it’s time, this is for undergraduate students, you have to have an exceptional financial need, meaning that you need to put all of your loans underneath one loan.
The only thing about consolidating your loans is the fact that you lose all the benefits at the low interest, you lose all of those things when you consolidate, so make sure to think twice about that.
The next student loan is going to be your federal Perkins loan, this is for undergraduate students with an exceptional financial needs, someone who seriously needs money to pay for their tuition or for their books or for things related to school.
When you usually get a student loan, you have what’s called a loaner the person who’s giving you the money, it’s going to be Sallie Mae or nail NIT or whatever company, that’s supplying your school or whatever with the money with your federal Perkins loan.
It’s a little different, but you can definitely apply for that, not all students do Perkins Loans, but if they do, it’s a great thing to apply for, if you truly need it to the last loan, I’m going to talk to you about the Parent PLUS loan.
This is an undergraduate loan, it has low interests and it’s for parents who want to co-sign, so that their students can have a little bit more financial aid money now, they will run a check that credit check on the parents to make sure that they’re able to pay the money back of the Hat or that they have good credit that they’re known for paying the bill.
The only thing about the Parent PLUS loan is what if you have a child who decides that he does not want to go to school or pay that loan back, then it does follow the parents to make sure that that loan gets paid off both the child’s credit and the parents’ credit is checked, it will destroy your child’s credit and it’ll also come back and destroy your credit.
Let’s talk about private loans, there are two types of private loans, you have your school channel loans and your direct to consumer loans, private loans are offered to you by banks or finance companies, they’re not connected to the school in any way.
The first one’s going to be your school channel loans, this one is certified by the school, it has a lower interest rate, but it can only be used for things associated with the school, they do reimbursements, but I’m not quite sure how often, if they don’t roll it over to the next semester and keep on using it to pay off your tuition and books.
The last private loan is going to be consumer loan, this one can run you into a lot of trouble and has very high interest, it’s not associated with the school and it’s dispersed straight to the student which means you have a maximum, you can still borrow a substantial amount, you can use it on whatever you want to use, you don’t necessarily have to use it on tuition and books, you should go out and buy that brand new pair of jeans or whatever you want which is not always a good thing.
What I don’t like about it is the fact that you have to pay attention to how much financial aid that you have already, so if you go out and get a direct-to-consumer loan, you borrow more than you need, you can be billed by your school, they can take your grant, take your scholarships, take anything they can, take your lower interest loans away.
Let’s talk about pros and cons with the federal loan, you can temporarily postpone payments, if you may be having financial need not to pay or you’re going through something, sometimes, you can get rid of your payments altogether.
If you go into a certain career field with the private loan, there’s no forbearance or deferment with a federal loan, there’s a subsidized version with a private loan, you have to pay interest with a federal loan.
There’s also a fixed interest, but with the private loan, there’s a variable interest, so you might start at 2% and get up to 29% by the time, it’s time to pay back with a federal loan, you have six months to start paying unless you go less than half time. With a private loan, you have to pay for a wire in school, they’re not willing to wait.