An education loan can help you meet the expenses associated with getting a college education. With the rising costs of tuition, and the money needed for books, meal plans, etc, an education loan can be a valuable resource.
You can either get federal education loans or private education loans. A great majority of college students prefer a federal education loan to pay for their college expenses. The most popular types of education loans are federal Stafford loans, and federal Perkins loan. Private education loans include the Sallie Mae loan.
An education loans can be need-based loan or not. A need-based education loan is generally available through the government. This loan will require collecting such information as your household income and expenses. This type of loan is great for low-income families who want to send their kids to reputable colleges. Examples of federal need-based education loans include a subsidized Stafford loan and federal Perkins loan.
Another type of education loan will look at the parent‘s credit situation to determine eligibility. An example of such a federal loan is the PLUS loan.
It is important to compare options when looking for an education loan. Things you should consider are whether the loan will start accumulating interest after you have completed your studies or from the date you take out the loan. The APR is a very important part of the loan offer to take into account when selecting an education loan.
It is important to differentiate between grants, scholarships and education loans. Education loans have to be paid back according to an amortized schedule. Grants and scholarships, usually offered to low-income families or students with outstanding academic achievements may not have to be paid back.
You can apply for an education loan by filling out the Free Application for Federal Student Aid (FAFSA) each year. For other education loans you may be able apply directly online to get your loan approval process started.
Most education loans may offer easy repayment terms, but if you are overwhelmed by debt, you can look into loan consolidation. This method allows you to use the lowest interest loan to pay off all your other education loans, thus reducing your monthly payments and overall debt burden.