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Student Loan Advice And Information

Author: Brad Stroh Author Ranking Blue | Posted: 28-10-2006 | Comments: 0 | Views: 229 | Rating:  (50) Article Popularity - Green (?) Got a Question? Ask.
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Student Loans

For many students, the dream of getting a higher education just isn't possible without the financial aid of a student loan. Fortunately, there are many opportunities out there to apply for and receive a student loan. And even better, http://bills.com is here to give you all the knowledge you need to choose the best student loan for you.

Student loans generally come from two sources: the federal government and private financial institutions, such as banks. Both require repayment of the loan, but that's where the similarities end. Let's take a look at both federal and private student loans.

Federal student loans are sponsored by the government and account for the biggest chunk of education loans. There are three main federal loan programs: The Perkins Loan, The Stafford Loan, and The Parent Loan For Undergraduate Students, also known as PLUS.

The Perkins Loan is the most affordable student loan, with an interest rate of 5% and low fees. But it's also the hardest to get because it's only given to those who need it the most. And the loan limit, at $4000, is the lowest of all three federal student loans.

The Stafford Loan comes with a variable interest rate that's higher than the Perkins, but lower than the PLUS Loan, due to the cap at 8.25%. As with the Perkins Loan, this student loan does not hold credit worthiness against the applicant. The Stafford Loan also has a much higher loan limit and is offered to both graduate and undergraduate students.

Compared to the Perkins and Stafford Student Loans, which are borrowed in the student's name, the PLUS Loan is completely different in that it is a loan for parents of dependent undergraduate students. A big advantage of this type of student loan is that it covers any remaining balance not covered by other forms of aid - in essence the loan limit covers your entire educational expense.

Now that we've familiarized ourselves with the different types of federal student loans, let's identify the attributes of a private student loan. This is a loan from a financial institution that takes into account your creditworthiness, not your need for aid. Your credit is reviewed by lenders and if approved, you can get a substantial size student loan in minutes, sometimes up to $30,000. A downside to private student loans is that repayment terms typically cap at 15 years, compared to 30 years for a federal loan. Also, if you become disabled or deceased, your heirs are required to payoff your student loan, whereas in a federal loan, the loan is forgiven, making repayment unnecessary.

As you can see, you have several choices when it comes to student loans. Making sure you choose the best option is a matter of getting informed on these choices, and picking to student loan that best fits your needs.

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About the Author:

Brad Stroh is currently co-CEO of Freedom Financial Network and Bills.com. If you would like more of Brad's articles, please visit the Bills.com information on Loans.

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Frequently Asked Questions

How is the credit crunch affecting students ...
By: ArticleAlley | 23-09-2008
How is the credit crunch affecting students already at college? I guess loans are even tougher to get if you are not working or have yet to graduate.

Career interest
By: kristine | 23-09-2008
i am interested in becoming a drug counselor.what steos do i need to take first?keep in mind i dont have the money for school.

Daughter needs 17K for BA @ Berkeley College in W ...
By: bss2518 | 21-09-2008
Daughter needs 17K for BA @ Berkeley College in W.P. Has some federal aid, but not much.  Has no credit history (she's 21) and no eligible co-signers for salliemae.  Where to apply during this financial nightmare?

Why would a high school diploma benefit me
By: nikki | 05-09-2008
Why would me recieving my high school diploma benefit me

Hostage
By: Roy | 04-09-2008
My builder no longer wants to finish my house.  I`ve been having problems with him.  He will not sign off on the construction loan.  It`s been four months and he still want sign because he does`nt  want to be responsible for the work he has already done.  The bank is getting upset with him.  I can`t continue with the house on my own because the builder has to sign  the draws for material purchased. Is there a law that takes him off the loan  sense he is no longer doing any more work on the home.  That way I can get another builder.

How many stafford loans can you apply for?
By: Shaun | 01-09-2008
how many stafford loans can you apply for?

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