About Student Loans
Student loans are a form of financial aid tailored to students who need financial assistance for college in supplementation to their institutional financial aid packages. The federal government, private lenders, and other financial institutions disburse student loans to help prospective students meet the financial requirements of attending college. Student loans provide financial leverage to students in terms of covering all their needs including tuition fees, study materials and living expenses, and can be a relief to parents with monetary limitations.
Types of Student Loans
There are two major types of student loans: federal and private. Federal loans are government- administered, and are disbursed directly from the U.S. Department of Education. Private loans are offered to students by banks and financial institutes such as Sallie Mae, Discover, and SunTrust. Federal student loans interest rates are usually lower than private student loans interest rates, and are generally fixed. While there are two major types of student loans, there are also two main ways the loan funds are disbursed to students: loans can be either Direct to Consumer loans or School Channel Loans.
As the name implies, Direct to Consumer loan funds are given directly to the consumer. The borrower, in this case, can use the funds on academic needs as they see fit. On the other hand, the School Channel Loans are given to the borrower’s college or university, which then utilizes the funds for the student’s educational expenses.
Eligibility for Student Loans
Eligibility criteria vary from loan to loan, lender to lender, and program to program. As such, it’s difficult to keep track of all of the requirements, so be sure to be in touch with your school’s financial aid office as well as with your lender. As a baseline, any and all student loans will require the following criteria to approve you for a loan: you must have U.S citizenship or a co-signer who is a citizen, a valid Social Security Number (SSN), and a clean record, free of defaults or delinquencies in other loan programs, as well as felonies.
Student Loans Interest Rates
Most federal student loans interest rates will be minimal, but their stringent policies can make it difficult to repay them. On the other hand, private student loans interest rates may be slightly higher, but these student loan repayments are made easy by no prepay penalties and more flexible terms and conditions.
How should I compare student loan interest?
There are many private lenders out there so making a choice might feel a bit overwhelming. When choosing a lender, it’s wise to look at other characteristics of a loan rather than just the interest rate. Use our Comparison Tool, which will allow you to compare different lenders and their various loan features side-by-side.
How can I lower the interest on my student loans?
You can lower interest rates by consolidating your loans? Loan consolidation means combining all loan payments into one single monthly payment. Consolidation reduces the hassle of multiple payments and also brings down the interest rate, making repayment much more affordable. There are a number of consolidation agencies, both federal and private.
Are interest rates lower on federal student loans?
Student loans that are provided by the federal government usually have lower low interest rate, as they are based on need and are provided to students regardless of financial status. The main eligibility requirements for these loans is a reasonable demonstration of financial need.
Miscellaneous Student Loan Topics
- Bank Loans
- Be Smart About Private Student Loans
- Before Borrowing Student Loans
- Choosing the Best Loans
- Choosing Private Student Loans
- Choosing the Right One
- Choosing the Right Student Loan for You Video
- College Cost Calculator
- College Loan Rates
- College Loans Parents
- College Savings Plan
- College Tuition Costs
- How to Compare
- Continuing Education Loans
- Credit Score
- Credit Score Student Loan
- Dept of Education
- Education Loan Borrowing Process
- Federal Student Loans Forgiveness
- Federal Vs Private
- Government Loans
- GradPLUS Loan
- Graduate School Funding
- Hierarchy of Loans College on the Cheap
- Hope Education Credit
- Independent Student Status
- Interest Rates
- LIBOR And Prime Rates
- National Student Loan Database
- Parent PLUS Loans
- Paying Off
- Rights Responsibilities As a Student Loan Borrower
- School Loan Interest Rates
- School Loans
- Student Financial Aid Services
- Student Loan Calculator
- Student Loan Lessons Learned
- Student Resources
- Successful Application
- The Student Loan Checklist
- Tips on How Much to Borrow
- US Department of Education Loan
- US Department of Education Loan Payment
- US Department of Education Loan Servicing
- US Department of Education Online Payment