Funds for students

Students who want to pursue their higher education in the streams of their choice would be facing their first hurdle in the form of funds for paying their tuition fee. Student loan programs would provide the student with the money they require to pay for their education and other expenses too. There are two major categories under which various loans are offered and those two are federal student bad credit personal loans and private student loans. Students who go through this article would understand the difference between the two and also the merits and demerits of each.

Federal student loans

Federal student loan is one of the well known and very highly rated student loan programs offered. Federal government directly controls and governs the distribution and operation of federal loan programs. All the major banks, financial institutions and credit unions that come under the category of federal student aid providers should offer federal student loan to those who get a guarantee from the federal loan department. The guarantee would act an approval letter for the student to obtain a federal student loan.

Perkins loans, Subsidized Stafford loans, Unsubsidized Stafford loans, PLUS loans etc. are part of federal student loans. Out of all the different types of federal student loans, the best loan program is the Perkins loans and the second best one is Stafford loans. Federal student loans are available for both undergraduate and graduate students. Graduate students would be able to obtain unsubsidized Stafford loan. Unsubsidized meaning, the interest rate charged on the loan at the time of schooling would be added up with the principal loan amount and it has to be repaid by the borrower.

Subsidized Stafford loan means, the interest rate charged during schooling would be paid by the federal government and the borrower will not have to pay the interest rate charged during that particular period. Apart from these specific benefits, most of the federal student no credit check payday loans allow the borrower to apply for a deferment period stating any financial discomfort situation. This would help the person postpone or reschedule the repayment period for a certain period of time. All the federal student loans carry lower interest rate charges and it is made available to all the students.

Private student loans

Alternative student loans are offered by private lenders and with that come a lot of risks. This particular loan is offered only to students who possess a good credit status, and those who do not possess a credit would have to get the help of a cosigner to secure the loan. Interest rate charged on the private student loan would be very high and other costs would also be charged on the loan. This would lead to a higher monthly repayment.

One positive aspect of a private student loan is that, the borrower would be able to secure a higher loan amount and as a result of that, they would be able to manage not only their tuition fee, but also manage other expenses such as books, laptop etc. Comparing these two student loans, the best and most advantageous one would be the federal student loan program.

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