Low Interest Student Loan

Low Interest Student Loan

Whether you're looking for your first student loan, or your trying to figure out how to pay off the ones you have this article will have all the information you need to make the process easier.

Student loans and how they work can be confusing for most people. At the same time, it is very important for you to understand how student loans work in order to get the best deal and avoid common but costly mistakes.

After reading this article you will have a basic understanding about student loans. We will also talk about your options to paying off your student loans in good times or bad.

What is a Student Loan?

At the basic level a student loan is usually an unsecured loan made by a bank or government back institution to you and depending on your age, your parents.

If you are going to attend College, you will more then likely need to borrow money to finance your education. In most cases your payments will not start until after you graduate, and hopefully have a job.

Should You Take Student Loans in Today's Economy?

If you are about to graduate High School, I suggest the better question would be what are your options in today's economy? Sadly even college grads can have a difficult time finding a job in down economical times, but you will never go wrong with a college degree in the long haul.

Our economy runs in cycles and when things start to pick up those that have degrees will be the first hired, while those without will need to wait longer for good employment.

When there are no jobs, the best place to be is in college furthering your education, preparing for a better tomorrow.

What if You Have Loans but No Job?

Because the economy is struggling, some resent College grads, might find themselves underemployed or even unemployed. This makes it difficult to make payments on student loans.

Low interest student loans are available through federal student loan sources as well as private sectors. Almost all private low interest student loans will require you to pass a credit check and this can be difficult if you are looking for private student loans options with bad or no credit. You will find that a many of the federal student loan programs do not require you to have collateral or even a credit check.

A lower interest rate means lower payments, a shortened repayment period and more money in your pocket. Interest will be charged beginning on the date of the first loan disbursement. Interest can be paid as it accrues or it will be added to the loan's principal balance upon repayment.

While it is sometimes possible to get a private loan with a very low interest rate, your best bet is with federal student loans. Federal education loans are available in either the Direct Loan or federally-guaranteed student loan programs. The Federal education loan programs offer lower interest rates and more flexible repayment plans than most consumer loans, making them an attractive way to finance your education.

Federal student financing (Stafford, Direct and Perkins loans) can be combined with outside and/or school awarded scholarships, like Pell grants (which do not have to be repaid), PLUS loans (made to students' parents), and other financing.

Start the process by filing the Free Application for Federal Student Aid (FAFSA), and submitting the application starting January 1 each year. Once your form is reviewed by the government, they will send you a letter called the student aid report. This report will tell you what programs you qualify for and how much money.

The school you listed on your FAFSA will also receive a copy of this report and will then structure a financial aid package, based on your qualified programs and send to you.

Don't pass up your opportunity for the lower rates offered by the government run programs, just because of paper work needed. The biggest benefit of filing a FAFSA could be that you also qualify for grants that you don't have to pay back.

The Federal student loan program is called the Direct Loan program. This is a low interest loan for students and parents to help pay for education beyond high school.

The loan is issued by the U.S. Department of Education directly, and there are no banks involved with these loans. Because you are borrowing directly from the federal government you will be able to administer everything to do with your loans using the Direct Loan Servicing Center. This makes it easier especially if you have multiple loans from different schools.

There are a number of types of loans that fall under the Direct Loan Program and there are some important differences that you should be aware of about how they charge interest.

The subsidized loan is for students that have a financial need determined by federal regulations. With this loan there are no interest charges while the student is in school at least half time. There is also no interest charge during the six month grace period following the completion or termination of classes, nor any deferment periods.

The unsubsidized loan is not based on financial need, and there will be interest charged as soon as the money is distributed. This means that even though you are not obligated to pay on the loan while in school, you will be charged interest during this period. You will also be charged interest during the six month grace period and any deferment periods.

The Plus loan is an unsubsidized loan for the parent of the student to help cover any educational costs not covered by any other financial assistance. Interest is charged during all periods for this type of loan.

There is also a Consolidation loan that combines any eligible federal student loans into one Direct Consolidation Loan. This has the advantages to lower your monthly payments by spreading you loan out over a longer term. While you will lower your monthly payment, you will pay more interest because of the longer term.

You can apply for any of the Direct Loans by filling out the Federal Student Aid application online. The information in the application is transmitted to the school you list in the applications and is used to determine all financial aid that might be available to the student.

There are no required payments due until the student falls below a half time status and there is also a six month grace period after graduation or termination in most cases. We will cover payment requirements and options in future articles.Whether you're looking for your first student loan, or your trying to figure out how to pay off the ones you have this article will have all the information you need to make the process easier.

Student loans and how they work can be confusing for most people. At the same time, it is very important for you to understand how student loans work in order to get the best deal and avoid common but costly mistakes.

After reading this article you will have a basic understanding about student loans. We will also talk about your options to paying off your student loans in good times or bad.

What is a Student Loan?

At the basic level a student loan is usually an unsecured loan made by a bank or government back institution to you and depending on your age, your parents.

If you are going to attend College, you will more then likely need to borrow money to finance your education. In most cases your payments will not start until after you graduate, and hopefully have a job.

Should You Take Student Loans in Today's Economy?

If you are about to graduate High School, I suggest the better question would be what are your options in today's economy? Sadly even college grads can have a difficult time finding a job in down economical times, but you will never go wrong with a college degree in the long haul.

Our economy runs in cycles and when things start to pick up those that have degrees will be the first hired, while those without will need to wait longer for good employment.

When there are no jobs, the best place to be is in college furthering your education, preparing for a better tomorrow.

What if You Have Loans but No Job?

Because the economy is struggling, some resent College grads, might find themselves underemployed or even unemployed. This makes it difficult to make payments on student loans.

Low interest student loans are available through federal student loan sources as well as private sectors. Almost all private low interest student loans will require you to pass a credit check and this can be difficult if you are looking for private student loans options with bad or no credit. You will find that a many of the federal student loan programs do not require you to have collateral or even a credit check.

A lower interest rate means lower payments, a shortened repayment period and more money in your pocket. Interest will be charged beginning on the date of the first loan disbursement. Interest can be paid as it accrues or it will be added to the loan's principal balance upon repayment.

While it is sometimes possible to get a private loan with a very low interest rate, your best bet is with federal student loans. Federal education loans are available in either the Direct Loan or federally-guaranteed student loan programs. The Federal education loan programs offer lower interest rates and more flexible repayment plans than most consumer loans, making them an attractive way to finance your education.

Federal student financing (Stafford, Direct and Perkins loans) can be combined with outside and/or school awarded scholarships, like Pell grants (which do not have to be repaid), PLUS loans (made to students' parents), and other financing.

Start the process by filing the Free Application for Federal Student Aid (FAFSA), and submitting the application starting January 1 each year. Once your form is reviewed by the government, they will send you a letter called the student aid report. This report will tell you what programs you qualify for and how much money.

The school you listed on your FAFSA will also receive a copy of this report and will then structure a financial aid package, based on your qualified programs and send to you.

Don't pass up your opportunity for the lower rates offered by the government run programs, just because of paper work needed. The biggest benefit of filing a FAFSA could be that you also qualify for grants that you don't have to pay back.

The Federal student loan program is called the Direct Loan program. This is a low interest loan for students and parents to help pay for education beyond high school.

The loan is issued by the U.S. Department of Education directly, and there are no banks involved with these loans. Because you are borrowing directly from the federal government you will be able to administer everything to do with your loans using the Direct Loan Servicing Center. This makes it easier especially if you have multiple loans from different schools.

There are a number of types of loans that fall under the Direct Loan Program and there are some important differences that you should be aware of about how they charge interest.

The subsidized loan is for students that have a financial need determined by federal regulations. With this loan there are no interest charges while the student is in school at least half time. There is also no interest charge during the six month grace period following the completion or termination of classes, nor any deferment periods.

The unsubsidized loan is not based on financial need, and there will be interest charged as soon as the money is distributed. This means that even though you are not obligated to pay on the loan while in school, you will be charged interest during this period. You will also be charged interest during the six month grace period and any deferment periods.

The Plus loan is an unsubsidized loan for the parent of the student to help cover any educational costs not covered by any other financial assistance. Interest is charged during all periods for this type of loan.

There is also a Consolidation loan that combines any eligible federal student loans into one Direct Consolidation Loan. This has the advantages to lower your monthly payments by spreading you loan out over a longer term. While you will lower your monthly payment, you will pay more interest because of the longer term.

You can apply for any of the Direct Loans by filling out the Federal Student Aid application online. The information in the application is transmitted to the school you list in the applications and is used to determine all financial aid that might be available to the student.

There are no required payments due until the student falls below a half time status and there is also a six month grace period after graduation or termination in most cases. We will cover payment requirements and options in future articles.