Obtaining a Student Loan
Student loans enable prospective students to finance their educational expenses when they are otherwise unable to do so. Student loans differ from other loans in that they have attractive interest rates and almost anyone can be approved regardless of their income or their credit history, which most students do not have.
The first step in obtaining a student loan is to complete the FAFSA, which stands for the Free Application for Federal Student Aid. The FAFSA should be completed and returned as soon as possible to avoid delays. Estimates can be made and any corrections and additional details can always be done at a later time. After completing the FAFSA, it s a good idea to visit the financial aid office at your school. There you will learn about the different types of student loans available and what you may actually qualify for.
The FAFSA is perhaps the single most important document related to obtaining financial aid. Anyone seeking governmental aid or need-based loans must complete this form. The FAFSA determines eligibility for loans, grants and other financial aid programs that are administered from within individual schools. The FAFSA determines how much a family qualifies for and estimates their expected contribution toward the financing of the student s education. The FAFSA can be completed online or by traditional paper form, although the online method is processed quicker.
Perkins Loans are a common choice for aspiring college students to finance their education and usually the first choice of loans due to their low interest rates. They are available to graduate or undergraduate students attending full or part-time who are able to demonstrate a financial need.
Stafford Loans are known for being easy to qualify for and interest may be subsidized by the government. These loans are available to either graduate or undergraduate students attending school either full or part-time. To apply for a Stafford Loan, you must complete the FAFSA, choose a lender and contact your financial aid office for information and suggestions.
PLUS, or Parent Loan for Undergraduate Students, allow parents to borrow large amounts of money to cover costs that are not paid for by other means of funding. Repayment on PLUS loans begins 60 days after borrowing and the interest will not be subsidized. The student must be a dependent and an undergraduate student attending school at least part-time.
Postponing the repayment of your student loan is called a deferment. Several loans offer deferment options allowing the student to begin repaying the debt after graduation. Other loans offer in-school temporary deferments if the student finds that they are unable to make their payments for a particular amount of time. This allows the student a reprieve from repaying the debt while avoiding late fees, penalties and potential damage to their credit.
Once your education is complete, your lender will most likely set up an amortizing schedule that eliminates the debt over a period of time with regularly scheduled payments. If you have more than one loan, you should consider consolidating them. Consolidation of student loans offers unique benefits not found in other types of loans. For starters, you won t have to qualify based on your credit score and there s no maximum amount available. You may also be able to postpone repayment on the consolidation and all interest paid can be tax deductible.
For lots of information on
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