Insufficient funds can prevent your quest for college degree, for the pile of cash necessary for higher studies could be as staggering as an iceberg which sank Titanic ship. But the financial ship of America which boasts of an AAA credit ranking from Standard & Poor’s is more powerful than the ill-fated ship, and will help you with aid from its treasury to help you pursue higher studies. There's two main types of education loans you can look forward to, the first being Federal loans and the other one is Private loans.
It's estimated that around 60% of U .S. students who do studies in colleges opt for the student loan each and every year. However upon obtaining it don't mistake it for a scholarship program, as it has an ironclad guideline you need to pay back the loan with interest. Whether you dropout from school or college midway holds no water nor can your filing of bankruptcy save you from not paying back.
Though it is certainly not scary about it, for financial industry experts estimate that the average monthly loan repayment amount is not more than 10% of what a graduate could earn in one month. Hence, the repayments can be easily made without sweating a lot. And you don’t have to start repaying till you have graduated, however, you can hear the interest meter ticking right from the day the loan is approved for you.
Federal Student Loans
Your first stop is always to look for the Federal Student loan, which is a more sensible choice as it is much more flexible in character and it has a lower interest rate compared to private loans from education loan financial institutions or banks. The federal loans could be subsidized which would bring down your repayment amount even more.
It is a subsidized Federal student loan that undergraduate can avail, and it is limited to $23,000 per college student. There are numerous repayment options, although you get ten years to pay off the loan. However the repayment will begin 6 months from your graduation, or after you drop out below half-time enrollment.
This is the kind of federal loan which is given approval to the parents, and they've the option of receiving higher limits than what the kids get. But parents are responsible for the repayment and not the students, and when they are not able to do this their credit standing would take the beating. Looking at the bright side of it, if they make payments in time they would do favors for their credit rating and stand greater opportunity for getting qualified for bigger loans in future.
Private Student Loans
These financing options have their own set of rules and are offered by private money lending institutions. These loans could be sanctioned to individual college students or parents and you can get higher loan amount too. Like Federal student loan you don’t be required to start making repayments unless you have graduated, however the interest begins instantly when the loan is approved. And the student ought to utilize these money just for study related expenditures only.