Not everyone has the resources to be able to finance their education. If your parents are not in a position to assist, and if you have exhausted the different scholarships and grants usually available to you for funding your education, you will have to borrow money to complete your own education. There are essentially two type of university loan you can apply for, federal government and private.
The federal government provides different methods of funding your education and locating additional finance through a federal school loan is the very first option you should look into. Some advantages of federal loans over exclusive loans include:
– They are available to all pupils
– They entice lower interest rates
– They generally have more time repayment periods
– They have options to defer/postpone monthly payments
If you can demonstrate financial need you will be able to acquire a subsidized federal college loan where the government pays off the loan interest for your period you are in university and when your loan is within its grace time period or in deferment. Your Economic Need is calculated as the Cost of Attendance minus Expected Family Share.
To apply for a federal government student loan you will need to develop a Free Application For Student Aid, termed as a FAFSA. Two typical federal student loans include:
i) Federal Perkins Loan
The government Perkins Loan is a low interest loan made available by your school together with assistance from the government. Availability of the Federal Perkins loan is based on your own financial need.
2) Federal Stafford Loan
The Federal Stafford Loan is regarded as the common school loan that features a six-month repayment grace period of time after leaving school. It is only awarded like a subsidized loan on the basis of financial need. The maximum amount it is possible to borrow is dependent in your school year, along with first year students receiving the lowest amounts.
In many cases the amount of money available through federal loans is not sufficient to cover the full costs of gaining an entire education. This means you are required to access additional cash by taking out private loans.
In general virtually any private school loan are applying for will be an unsecured loan which means no property will be used since collateral to secure the loan and the loan will therefore carry greater interest rates.
Acceptance for any private school loan you apply for will be determined by your credit score. The interest rate applied to your loan will also be decided from your credit score.
One key advantage of a private school loan is that the money can be used for something, but this does imply you need to exercise some financial discipline whenever you receive the money from a personal loan.