Student Loans for College Education
Published by Nanni on Wednesday, June 27, 2012
There is no doubt about it – college can be expensive. Luckily, though, there are plenty of ways you can be helped out financially. One of which is to get a student loan. If you are looking for college loans, there is good news and bad news. The bad news is that there are literally hundreds of companies which all compete very fiercely in this market. Thus combing through them to get a good deal is sometimes overwhelming. The good news is that this competition will drive down prices amongst the more legitimate companies. This article is here to help you make the best, most informed decision whilst you are thinking about applying for a loan for school or college.
The first important thing you need to know is the fact that oftentimes the amount a company will give you, if at all, may depend on the courses of study you are and will be doing in college. Very often, loan companies are more willing to lend money to students who are studying at medical school, and are interested in pursuing a career relating to medicine. This is because there are governmental and legal advantages in these companies in doing so. Also, as medicine can become quite a lucrative career, they know that they will get paid back well.
Also, you need to understand what exactly a given student loan covers, especially because a student loan typically comes in a variety of forms and amounts. The most common option available is a loan which will cover tuition fees and everyday college expenses such as on-campus or off-campus housing, transportation, computers, books, and most of other school related expenses. Companies offering this kind of loans typically promote excellent rates (because of the extremely competitive industry), and could offer you other incentives such as cash back schemes, money off and discount vouchers and cards.
Generally, students should only think about getting a loan for private education if, and only if, the Federal Stafford Loan (FSL) has been maximized. They should also submit the Free Application for Federal Student Aid (FAFSA), which may allow them to obtain grants, work-study and other forms of student aid. Undergraduate students should also try a comparison of costs with the Federal PLUS Loan, as the PLUS loan is usually a lot cheaper, and its repayment terms are a lot more flexible.
Be careful, though. The cost of a loan can significantly increase with the charges imposed upon you by the lender. A loan that boasts a fairly modest interest rate, but contains sneakily high fees can, at the end of the day, result in more expense than a loan with no fees and a significantly higher interest rate. As a general rule of thumb, 3% to 4% in fees is about the same as a 1% higher interest rate.
In addition, be cautious of a comparison of loans with dissimilar terms of repayment, as a loan with a longer term will have a lower APR, even though the total amount of interest paid is significantly higher.
The first important thing you need to know is the fact that oftentimes the amount a company will give you, if at all, may depend on the courses of study you are and will be doing in college. Very often, loan companies are more willing to lend money to students who are studying at medical school, and are interested in pursuing a career relating to medicine. This is because there are governmental and legal advantages in these companies in doing so. Also, as medicine can become quite a lucrative career, they know that they will get paid back well.
Also, you need to understand what exactly a given student loan covers, especially because a student loan typically comes in a variety of forms and amounts. The most common option available is a loan which will cover tuition fees and everyday college expenses such as on-campus or off-campus housing, transportation, computers, books, and most of other school related expenses. Companies offering this kind of loans typically promote excellent rates (because of the extremely competitive industry), and could offer you other incentives such as cash back schemes, money off and discount vouchers and cards.
Generally, students should only think about getting a loan for private education if, and only if, the Federal Stafford Loan (FSL) has been maximized. They should also submit the Free Application for Federal Student Aid (FAFSA), which may allow them to obtain grants, work-study and other forms of student aid. Undergraduate students should also try a comparison of costs with the Federal PLUS Loan, as the PLUS loan is usually a lot cheaper, and its repayment terms are a lot more flexible.
Be careful, though. The cost of a loan can significantly increase with the charges imposed upon you by the lender. A loan that boasts a fairly modest interest rate, but contains sneakily high fees can, at the end of the day, result in more expense than a loan with no fees and a significantly higher interest rate. As a general rule of thumb, 3% to 4% in fees is about the same as a 1% higher interest rate.
In addition, be cautious of a comparison of loans with dissimilar terms of repayment, as a loan with a longer term will have a lower APR, even though the total amount of interest paid is significantly higher.
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