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Education is generally costly and in order to pay for college education there are some banks that offer student loans. A student loan aims to help students pay for books, school tuition, and living expenses. It is different from other types of loans in the sense that the interest rate can be considerably lower with a repayment schedule that can be delayed while the student is still going to college.

The United States provides student loan programs that are guaranteed federally to help college students finance schooling. Even though these loans come with interest, they are usually presented as part of a complete package for financial age that also includes grants, scholarships, or opportunities for work study. Most college students in the US are qualified to take out any kind of student loans; however, the amount may vary and is dependent on factors such as the parents’ income level, the student’s income and other financial aspects. There are three kinds of student loans in the United States: two of them are subsidized federally and unsubsidized but sponsored by the government, and the other kind is the private student loans.

Federally Guaranteed Loans and Private Loans

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In choosing a loan, students should start with the federally guaranteed student loans. This is directly accessible through banks or through your school. These loans have several repayment options, lower interest rates, repayment periods that are longer, and credit requirements that are easier to comply to. Before applying for a federal student loan, the borrower needs to complete and submit the FAFSA.

The Parent Loan for Undergraduate Students (PLUS) is generally intended for parents of dependent undergraduate students who are enrolled at least half-time. The parent applicant must not have any adverse credit experiences in the past. This loan has a fixed interest rate that is usually higher than the rate Stafford Loans. In this program, the repayment starts while the student is in college.

Stafford LoansCredit:

Anyone can apply in the Stafford Loan since it is not important to express financial need; it is the most common federal loan. This loan has a fixed interest rate. It comes in two structures: unsubsidized and subsidized. In Stafford Loans that are subsidized, the student’s loan is paid by the federal government while he is still in school. On the other hand, the interest in Stafford Loan is paid by the student but he can give payments until he graduates. Students can borrow depending on their college level. In a year, freshmen can borrow up to $2,625 while seniors can borrow $5,500.

In Perkins Loan undergraduate and graduate students who demonstrate financial need are offered with a very low fixed rate of 5%. Undergraduates can borrow up to $4,000 while graduate students up to $6,000 depending on their level of needs. In this type of federal loan, the money is distributed from the school and the student does not have to be enrolled to be qualified.

Before going to private student loans, you must consume your alternatives for federal loans. Oftentimes, this loan does not cover the complete cost of college tuition. Students can loan up to 100% of the education cost. Lower interest rates are available if your university certifies that you are enrolled directly in school. The check is then sent directly to the school. This loan may be utilized for tuition, room and board, books, or a computer.

A Comparison Between Federal Loans And Private Loans

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Federal student loans have fixed interest rates and could also include interest that is dependent on the need of the students. Federal student loans also provide flexible deferment and repayment options, which include income based terms of repayment. However, those who take advantage of this kind of loan have to complete the FAFSA and should also provide school certification, and it is also required that the individual has no adverse credit history.

Private student loans, on the other hand, can help in a student’s financial needs especially if grants, scholarships and federal student loans are not enough to fund his education. Private student loans have interest fees and rates that are determined by the loan provider and may sometimes depend on the borrower’s credit rating. The interest rates may be variable, and although there is no need for a co-signer, a student may be approved for a loan with better interest rates if he has a qualified co-signer.

Student Loan Banks

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There are various aspects that you need to take into account in choosing the best student loan banks. It is better to get a bank that offers you a flexible interest. It is vital to inquire about the borrower incentives offered by the bank; incentives are their way of attracting debtors. Before banks offer a loan, they require you to have a co-signer. One more factor to consider is to determine if student loan banks allow you to manage your account online. This is more convenient since you will be able keep track of your expenditures from any place.

Nowadays, private student loans are more popular than federal loans since it provides more money. There so many student loan banks out there thus, you must choose the perfect one based on your financial needs. Since there are many private companies that can lend you money for education, it won’t be hard to find a plan that is right for you.

One of the best companies to borrow money from is Wells Fargo Private Student Loans. They make it so easy for you come up with repayment plan that matches your current financial situation. They offer loans that are intended for students, parents, undergraduates, graduates, and even law school graduates. Chase is another company you should consider borrowing from. What is best with them is that their plans allow you to choose a settlement plan of up to twenty-five years. They also offer modest interest rates and higher credit limits for graduate students taking up medicine. Citizens Bank offer their debtors half a percent decrease on interest rates and they will eliminate you as a co-signer you accomplish a three consecutive years of on-time payments.


Even though you did not finish school, a student loan you made needs to be repaid. Borrow wisely because the amount of money you borrow today will have effects that can influence your life in the future.