Student Loans – Realize Your Academic Dreams

Student loans are really a convenient way of fulfilling academic dreams. Student loans are given to college students who have enrolled in a college and have completed at least one semester of the course. Student loans are provided generally to students who are bright in academics. Private lenders provide student loans with or without guarantee from the government.

When government gives the guarantee for student loans, then it could be two types, unsubsidized or subsidized student loans. Let us discuss both these student loans one by one.

Subsidized student loans have a lower yearly limit. The government pays the interest of the student loans when the student is in school.

Unsubsidized student loans usually have a higher yearly limit. The student pays the interest of the student loan. If the student chooses not to pay the interest during the schooldays, the interest amounts are added up and included with the balance amount that needs to be paid. Usually in all student loans, repayment schedule starts after a certain period. The period could be from 2 to 5 years. It does not matter whether during that period you finish your studies or not, the repayment of the student loans starts as scheduled.

Student loans come with a very convenient interest rate as it is meant to help a student, who is about to start his/her career. The interest rate of the student loan depends on the market interest index. With the index the rate floats. If you repay most of the loan amount during low rates, you can save a huge amount of money. This is called student loan consolidation.

The repayment period of the student loans could span up to 25 years. The duration depends on the loan amount. Small student loans have shorter repayment time and a large student loan would have a longer repayment period.

With student loans tuition fees, purchasing of books and stationary, hostel expenses and healthcare expenses can be taken care of. Some student loans also provide for study material like computer and Internet. Some even provide automobile expenses for the convenience of the student.

Every student does not come from a financially well off family. Many students come from a humble background but could do well in academics. In such a scenario student loans are a good option for them. The repayment of the student loans starts way after the time of getting the loan. By that time the student can study and get a job and in many cases can repay the loan on his/her own. The parents don't have to carry the huge burden of expenses related to studies. Definitely taking student loans for studies is good for the child's career and of course for life.

After finishing studies a person who has taken a student loan can repay it when he lands a job. It is up to the person whether he or she wishes to pay a lump sum and finish the loan. All in all student loans are great for a person's career.

Student Loans Help You Afford the High Price of College Tuition

First, the interest will likely be far less than the interest of the market. Most students take out a Stafford loan because they do not require any form of credit that students should qualify for. Like the Perkins and Plus college loans, the Stafford college loans are subsidized, which means that while you are in school, the government will pay the interest of your student loan.

You might also need to get an unsubsidized loan or two. But the good news is that you do not have to pay it until you graduate and start making monthly payments off your loans.

Usually the interest rate on Stafford loans and most loans is low but it is an investment in your future which will likely benefit your lifetime salary. Another benefit of loans is that they also offer the benefit of offering flexible payment arrangements; you can even defer your loans for an extended period of time if you are trying to find employment.

To qualify for any of the federal programs, the student must enroll at least half-time in school and can be either a graduate or undergraduate student. The grade level of the student determines the amount of the loan during a given academic school year. Financial need is not necessary to qualify for federal student loan programs and Stafford loans in particular, can be paid back up to 30 years depending how much was originally borrowed.

Advantages and Disadvantages of Federal Student Loan Consolidation

Student loan consolidation is a process that allows students to combine all federal and private student loans and make one monthly payment. However it may not be an option for every college student approaching graduation day or a recent college graduate. Here's some information about whether federal loan consolidation is right for you.

Bank lenders and consultants dissuade against consolidating private and federal loans together because the new consolidated loan will then be a private loan and you will therefore loose all the benefits that came with the federal loans, such as loan deferment if you decide to pursue graduate school.

So what are the pros and cons of federal student loan consolidation? This question depends partly on how much you owe, how much you've already paid, and other personal financial variables. Here is a brief overview:

Advantages of federal student loan consolidation

1. By consolidating your loans, you make one convenient payment that is also lower in amount. The federal interest rate is also likely to be lower than the combined interest of your original loans.

2. Borrowers can choose from four different payment plans, including an extended payment plan that can extend up to 30 years, depending on the amount that is owed.

3. Thankfully, there's no fee for consolidating your government student loans and there's no credit check when you consolidate your government student loans. 4.There's also no penalty for paying the loan off early.

Disadvantages to Student Loan Consolidation

1. Taking an extended payment plan means paying more interest in the long run. Higher loans mean more interest.

2. The consolidated student loan rate might be higher than the interest rates on your other loans.

3. Consolidating your loans during the six month grace period after graduation results in loosing the remainder of the grace period.

4. Consolidation is not to your advantage if you've already paid off a large of your student loans.

5. Finally, check whether you end up forfeiting the special benefits that come with other federal student loans such as Plus and Perkins loan if you end up consolidating your federal student loans.

What College Students Need to Know about Stafford Loans

Student loans are one of the most popular methods used to help pay for college, but understanding how each one works is confusing. Like the Perkins and Plus Loans, Stafford loans are a type of federal loan program which can either be subsidized or unsubsidized. With a subsidized loan, the government will pay the interest that accrues while the student is in school while the interest with unsubsidized Stafford loans will accrue until the student pays the loan balance.

Depending on the type of Stafford loan, the student can borrow the money either from a bank or a credit union, or from the Department of Education. The interest rate for Stafford loans varies from each year, but is typically lower than the general consumer market, which of course is an important factor when paying back the loans.

How Do Stafford Loans Work?

In order for a student to qualify for Stafford loans the student must enroll at least half-time in school and can be either a graduate or undergraduate student. The grade level of the student determines the exact amount the student is permitted to borrow on the student loan. The amount subsidized is limited to a certain amount that is comparable to the total loan value the student borrowed that same year. Financial need is not necessary to qualify for Stafford loans and they may be paid back within twenty-five to thirty years, depending on the type of Stafford loan and the total amount that was borrowed. In certain circumstances students have various repayment options.