Studen Loans

Student Loan Introduction

Student loans exist to help students pay their educational fees. Most student loans are given a lower interest rate than regular loans and are generally government issued. Students finance works differently in various countries however the most common loans are undergraduate loans, federal family education loans, college student loans and private student loans.

Federal student loans in the USA can be made out straight to the students or to their parents. No payments need to be made whilst the student is enrolled if the payments are made to the student. If the loan is given to the parents then payments must start immediately however there is a higher loan limit.

Private student loans have higher limits but also no payments due until after graduation. Private student loans can be used for education requirements such as computers, books, tuition and board.

As mentioned, most student loan payments do not being until after graduation. This assist the student in being able to save the small amount of money they may earn whilst studying. It also means they must be committed to paying off the loan once they leave college.

Private loans are based on the credit history of the applicant and the interest rate will be based on this. Excellent credit history will incur lower rates and lesser fees. Federal loans are not based on credit history and you therefore do not require a co-signer.

Student loans must be repaid unless under certain circumstances. In some circumstances federal student loans can be forgiven after 25 years on an income-contingent plan.

Student loans in the USA need to start being repaid after at most six months from the time you finish (or stop attending) school. This first six months is a grace period but you are advised to begin payments right away to ensure it is paid off in the minimum amount of time.