Finance Loan

The Best Loan Student You Can Find

Published at 01/24/2012 20:54:04


Going to college is always an exciting time in ones life, as you begin the next stage in your life. But this desire for higher education can be cut short due to expensive tuition costs and very little sources of funding at home. If you are going through a similar situation don’t fret, there are many loan student options available to you, which you can take advantage off. Here are some viable options you should consider, in your journey towards higher college:


Federal Student Loans

Through this program, a loan student can receive funding from the federal government, whereby funds are channeled through schools. Students who qualify for the new Stafford loans are charged interest at rate of 4.5% from 2010-2011, which is a drop from the 5.6% charged in the previous year. The general arrangement is for the government to pay the interest on the loan, while you are in school and the following 6 months. There is also an optional unsubsidized Stafford loan, with an interest rate of 6.8%. A 1% fee is charged on both programs. Eligibility for a Stafford loan is dependent on the family’s yearly income, capped at $80,000. Students with the assistance of their relevant family members are required to fill out a Federal Free Application for Federal Student Aid (FAFSA).


Federal State Programs

This type of loan student program is funded by states governments and is open to students who reside or attend college in a state which offers the program. The rates of interest offered can either be fixed (6-8.19%) or variable (1.78-3.8%). As a condition to the loan, states will often require applicants to produce a cosigner, to protect themselves against default. There is no cap on the amount of interest paid on a variable loan, which could make it difficult to gauge the amount to be paid back in the long term. Some states will start requesting repayment for loans, while still in school. None the less, their terms are often more favorable than those of banks.

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PLUS Loans

A PLUS loan is federal loam offered to parents with a loan student, charged at a fixed rate of interest and a 4% fee. This loan can cover the entire cost of college, as long as they can pass a credit check. If a parent is unable to meet the credit standards set by the federal government, they can always use a co-signer to boost their chances of approval.

Private Lenders

Despite the recent effects of the credit crunch on private lending institutions like banks, most of these institutions are still looking for ways to provide financing to loan student. For instance, Wells Fargo is offering loans to parents and also grandparents of college students. This loan has no origination fee and variable interest charged will range from 4.25% to 10.74%, according to your credit standing. Private loans are a good option, once you have exhausted the other three methods. You should also ensure to make all your interest payments, while still in school to reduce any upsets in accrued interest charges after school.