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Student loan (Page 1 of 2)
DEFINITION
A loan is a debt, which entails the repartition of financial assets over time, between the lender and the borrower. The borrower receives an amount of money from the lender, which should be paid back to the lender. The cost of the service depends on interest on the debt. Student loan is a loan offered to students to assist in payment of professional education. It doesnt matter if you are graduate or undergraduate student. You can borrow money in all cases. Parents may also borrow to pay the cost of education for dependent undergraduate students. Maximum loan amounts depend on the student’s year in college. These loans usually carry lower interests than other loans and are usually offered by the government. Often they are supplemented by student grants which do not have to be repaid.
THE POINT
The cost of professional education rises every year that is why today, student loans are a fact of life. The key role belongs to the government as in any government sponsored program. While included in the term “financial aid” professional education loans differ from scholarships and grants in that they must be paid back. Student loans provide a variety of postponement options and extended repayment terms and do not require credit checks or collateral. The federal funds for education are limited and government and private lenders give the students flexibility in choosing the type of college that is right for them.
CATEGORIES OF STUDENT LOANS
There are different types of student loans that are available. They include:
Stafford Loans: Stafford Loans are issued by the federal government. They have a lower interest rate than other types of loans. There are either subsidized and/or unsubsidized Stafford Loans. When you take subsidized loan, the government pays your interest for you while you are studying. Subsidized loans are based on financial need. With unsubsidized loans, you will be charged interest while you are studying, but do not have to begin paying the loan until you graduate college. Unsubsidized loans are available without showing financial need. You must begin paying back these loans 6 months after you graduate.
Direct Student Loans (Perkins Loans): Perkins loans are given to students based on extreme financial need, and usually have very low interest rates. The interest rate is lower than a Stafford. Since the college already has been given its Perkins funds, it simply transfers the loan to your student account as a credit. You have to begin paying between 6 and 9 months after you graduate.
Subsidized Direct Loans: Direct loans are the same as a Stafford except that the federal government is the lender.
PLUS Loans: This is a parent loan, offered by the federal government that is unrelated to need. Generally, parents can borrow up to the total cost of education, minus any aid received. These loans are given regardless of your income, but lenders will consider your credit history. The interest is low on this type of loan and repayment usually begins within 60-90 days after full disbursement of the loan, or after the student graduates.
College Students Car Avail Car Loans Easily
These days, it is possible for human beings to satisfy every need even if they dont have money, and this can be done with the help of loans or external finance, which is easily available in the market. Finance is essential at a very primary stage when we consider the life of a student. A student needs money for paying tuition fees, buying books and for transportation. car loans for college student are available for students who find it difficult to buy a car themselves. It is known that a college student needs to travel frequently, from college to home and for other work.
Waiting for public transport can waste a lot of productive time of the student, which otherwise can be used for studying. Car Loans for college students are given on the basis of the credit record of their parents or the cosigner. Every student desires a good car, but sadly there are only few ones who are able to buy their dream car.
Types of student car loans
Student car loans are classified in to two very relevant groups of loans in America:
- Subsidized federal loans
- Unsubsidized federal loans
As the names suggest, the subsidized and unsubsidized federal loans are in direct proportion to the merit of a student. The loans which are subsidized are completely based on the performance and merit of the student. Everything including the financial situation of the student is considered, before the student auto loan is sanctioned. On the other hand, when the subsidized loan is sanctioned, the component of need is not the dominant issue. In addition to this, student car financing is paid to the student directly, or to the students parents.
If the loan is of a higher value, then it is paid to the parents of the student, as compared to a loan that is directly paid to the student. Please take note of the fact that though both subsidized and unsubsidized federal loans are assured by the department of education in the US, the interest rates vary subsequently. But, generally the rates for student auto loans are lower than other types of loans.