Student Loan Basics

This Article provides the basic knowledge about Student Loans that a Student can apply for.

Now student loans can be obtained from two sources –

· The federal government

· Private lenders.

Let us read a little about the first category

Federal Student loans:

There are four main federal loan programs:

Federal Stafford Loan

The Federal Stafford loan is made in the name of the student and is provided is based on need. It does not require a credit check and does not have to be repaid until after the student graduates, leaves school or stops attending on at least a half-time basis. Some school offer Stafford loan directly through the federal government.

Federal PLUS Loan

Federal PLUS loans are made in the name of a parent. They do require a credit check; the credit criteria to obtain a PLUS are not as stringent as they are for other types of consumer loans. Repayment of a PLUS loan begins after the loan is fully disbursed.

Federal Graduate PLUS Loan

The Federal Graduate PLUS is just like the Federal PLUS loans except that it is made in the name of a graduate student. It is important to remember that the Federal Graduate PLUS requires payment as soon as the loan is fully disbursed.

Federal Consolidation Loan

Federal loan consolidation is for students who have graduated or parents who wish to extend the repayment period on their current PLUS. You can combine all of your federal student loans into one loan with a Federal Consolidation Loan. Consolidating also locks the interest rate you pay on your loan.

To obtain federal student loans, you will first have to file the Free Application for Federal Student Aid (FAFSA).

The FAFSA is the application for all federal financial aid including federal student loans.

Private student loans (Alternative student loans).

Private loans are made by banks and other lenders. They must be used solely for education expenses, but offer convenience and flexibility that not found in other federal loan programs. To obtain this loan, you will need good credit and most students will need a qualified co-signer in order to obtain a private loan. In these kind of loans interest rates, fees and other loan program terms are competitive and they vary widely from lender to lender thus it is important to compare your options before choosing a private loan.

Thursday, May 31, 2007

Information On Private Student Loans

Information On Private Student Loans

by Bob Hett

Getting an education after high school is becoming more and more expensive. But it is also becoming more and more of a necessity to get a good job that pays well and has adequate benefits. For this, most young people need to attend college or some other type of additional training. Most of them can’t afford to pay for their education by themselves and end up looking for financial help of some kind.

Student loans are a popular choice, but federal student loans are based on financial need, and some students do not fit into those guidelines. An alternative choice for these students or their parents is a private student loan. These are loans done through private lenders instead of the government. The advantage of these types of direct student loans is that they have many of the same kinds of benefits as federal loans.

These loans can be used for any and all college expenses. Things like tuition, books, supplies, computers, and living expenses are all things that qualify for private student loan funds. These loans are unsecured, meaning that no collateral is needed. The loans are credit-based instead. This can mean that the student might need a co-signer if they have not established a credit history, or their parents can apply for the loan instead.

A private education loan is usually a low-interest loan. Borrowers can shop around to find the best rate. There are generally no application fees to apply for this type of loan and there are also no deadlines for applying. The money can be delivered in as little as five days, and the money is given to the student instead of the school. The student is then responsible for paying for their various educational expenses.

This kind of loan has other advantages similar to federal loans. The interest and principal payments can be deferred until the student graduates from school. For most of these loans, a student is required to be attending school at least half time for the deferral of payments and interest.

When the student does graduate from college, the loans can usually be deferred for six months until the student finds employment, and then the loan holder will generally have a variety of repayment options available so that the student can tailor their payments to their income.

A private student loan is the ideal answer for students who do not meet federal requirements for financial need or whose educational expenses are not fully covered by their federal financial aid. Many lenders offer private student loans to students or their parents and the application process is simple and free. The loan requirements are usually less stringent and the repayment options are affordable for young professionals. A private student loan is a great way to finance the education of any student that needs financial help.

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About the Author

Bob Hett offers great tips and advice regarding all aspects concerning Online Degrees. Get the information you are seeking now by visiting