What Types of Student Loans are Available?

Student loans are a type of financial aid for post secondary education. They are just what the term says, a loan and must be paid back to the lender at some point in time. When they are paid back depends mostly on what type of loan it is.

There are three basic types of loans and they are federal loans made to the student, federal loans made to the parents and private student loans that can be made to either the parent or the student. The amounts, deferment period and interest can very greatly depending on the type of loan that you get.

The Perkins Loan and the Stafford Loan are two types of federal loans that are available to students. Federal loans can be used to supplement other types of payment resources and they can be used at colleges and universities. Whether the interest on these loans will be subsidized by the government, depends on your financial need.

Federal student loans made to parents are normally what is referred to as a PLUS Loan. The Parents Loans for Undergraduate Students (PLUS) can be gotten in amounts much larger than the federal student loans for students. The amount should cover almost any type of education. There is no grace period with this type of loan. Payments will start at the time the loan is taken out.

Private student loans can vary greatly from each other in many ways. They are usually issued by specialized education lenders or banks. These loans can be gotten for larger amounts than most federal student loans and they normally have a grace period of 6-12 months. The interest rates on private student loans usually are higher than federal student loans, but not as high as private loans.

You interest rate and the amount of the origination fee (a fee that is charged on most private student loans) are based on your credit score Private student loans are issue based on your credit score and federal student loans are based more on a need basis. It is best to shop around for private loans and compare the elements of each loan to get the best deal, because they can vary greatly.

You have several options when it comes to getting a student loan. The one that will work best for you will depend on what type of school you are attending, your financial need and the amount of money you need to borrow. The school may have financial advisers that re able to assist you in selecting the student loan that is best for you.