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Should I opt for school loans to fund my college education?

College is just around the corner and it seems I have to start thinking about school loans to fund my college education. I need to know how student loan rates work. I guess there are many loan providers out there and all of them cannot offer the same rate, I think it will be wise to dig deeper into how loan rates function before I can approach the companies out there offering graduate student loans. There is a great need to learn how to apply for a student loan so I don’t have to fumble when the time to apply comes.

Megan Page

in Student Loans

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Chelsea Hayes on January 16, 2018

Why not? It is obvious, you will be offered school’s financial aid if you apply for it and are found eligible for the aid by the lenders. This is just money which you will return after borrowing. Almost every student who plans to attend college needs to consider some kind of financial aid. Very few of students, or families, out there can afford to pay tuition costs from their own pocket. Grants and scholarships here are of great help to shoulder part of the burden, after which still many students will fall far short of their total education costs despite these options. College loans assist here in bridging this financial gap. It is critical to understand the different sources of lending, and what can be expected from them in the way of application procedures, funds and repayment requirements. If you decide to go for a school loan, you need to make sure that you understand who is making such a loan plus the terms and conditions on which such a loan is based. You can always find a student loan from either the federal government or private lenders like banks or financial institutions. The federal government’s student loans offer borrowers interest rates that are more flexible than those from banks or other private financial institutions especially when it comes to their repayment plans.

Interest rates for student loans are fixed for all federal student loans, this means that your interest rate will not change throughout the lifetime of the loan. The amount of the interest that you’ll pay for your loan will be dependent on whether the loan you have taken is subsidized or unsubsidized. The federal government does pay interest that accrues on subsidized loans during the period when you are still in school. Unsubsidized loans have their interest rates accruing as you are still in college and this means that it is capitalized or added to your principal.

The procedure of how to apply for student loans is not very complicated. You’ve just got to fill out your FAFSA form indicating your interest for a direct student loan. Then the university will proceed to review the application for your eligibility and send you an email directing you to your account, where you are supposed to log on and accept your awards. After accepting your awards, you’ll be given a link to studentloans.gov on your account. You can then find on this website the instructions on how to fill out other necessary documents electronically. After doing this, you’ll be good to get your graduate student loan depending on your need anyway.

Brian Warnera year ago

There are a lot of factors to consider by the way when evaluating your graduate student loan options. It is worth noting that there are some private student loan lenders who offer both fixed and variable interest rates for the borrower, this is of course for the students who have exhausted federal loans and want to explore private lenders to supplement their studies. The interest rates for private student loans are based on credit. And something different from federal student loans is that the interest rate is not the same for every loan borrower. The students having better credit or ones having a creditworthy cosigner in their application may stand a chance to receive better interest rates.

One good thing to do is to always pay your debt in time to avoid penalties from the lenders. It is important to understand how interest rates for student loans impact the total payment during the life of a loan. For instance, if you take from the bank a 15-year, $50,000 loan at an interest of 5 percent, just a 2 percentage point increment on the interest can cost you almost $10,000 interest charges on top of what you should have paid without the increment.


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