About Student Loans
The rapidly increasing cost of attending college, combined with the recession, has made it very hard for most students to afford a higher education. Therefore, at a time when a college degree is essential for most well-paying entry level jobs, many students are turning to different sources of funding, such as student loans. Student loans are specially designed to help students get the funds they need to pay for tuition, books, other study materials and living expenses.
About Student Loan Lenders
Student loans are offered by a number of lenders, including federal, state and local governments. Federal student loans are preferred by most students because of their low interest rates, flexible repayment conditions and deferment options. Government-backed student loans include Stafford loans, federal Perkins loans and Parent PLUS loans. Perkins and Stafford loans are awarded based on financial need, while Parent PLUS loans are not need-based. In order to apply for these loans, students are required to fill out the Free Application for Federal Student Aid (FAFSA), which can be found online at fafsa.ed.gov.
Private Student Loan Lenders
Other than the federal government, a number of private student loan lenders offer financing options to students. Private student loans may have higher interest rates as compared to federal student loans, but they have some advantages, such as flexible borrowing limits and rewards for making payments on time. The interest rate on a private student loan can also be lowered if there is a co-signer, or if the student's family has a solid credit history. In many cases, federal aid alone is not sufficient to cover all expenses incurred at college and private student loans are a great way to bridge this gap while also paying for tuition and living expenses.
Finding the Best Student Loan Lenders
In order to find the best student loan lenders, it is important to do your research. Federal student loans are an excellent way to pay for college, but often these loans do not cover everything. If this is the case, should look for private student loan lenders.
Q:Do student loan lenders offer a loan consolidation option? What are its advantages?
A:Institutions that offer loans to students usually offer the loan consolidation option. This option allows the student to consolidate all loans into one so that they only have to make one monthly payment, meaning they do not have to go through the hassle of making multiple payments. Loan consolidation may also mean a reduction in interest rates.