Sallie Mae offers several different types of loans, some are unsubsidized loans. But what does unsubsidized mean? Well subsidized loans are for low income families and the federal government pays the interest while the student is in school and through the initial 6 month grace period. Unsubsidized loans state that you must immediately begin paying the interest even if you are still in school. Although there is a way to get around this. Basically you defer the loan interest, after that it is capitalized as part of the balance and you then start payments following your 6 month grace period. The unsubsidized Stafford loan is one of the most popular loans in the United States. Other loans that are unsubsidized are the Perkins Loan, PLUS Loans, and even private and alternative loans. The interest is the responsibility of the borrower.

 In order for you to apply for an unsubsidized loan you will have to fill out the Federal Application for Student Aid (FAFSA). This is a 5 page form that you have to fill out in order to be eligible for any free money from the government. Many students don’t fill this out, over 8 million, usually from procrastination. If you don’t fill out the FAFSA then the only loans that will be available to you are the high cost and high interest loans. So fill out the FAFSA early so it is done and over with and you won’t regret it.

The good part of unsubsidized student loans is the low interest rate. The Stafford Loan interest rates will be reduced from 6.8% to 3.4% in 2012 due to the College Cost Reduction Act of 2007. The Perkins Loan interest rates are set to a low 5%, you’d have to be very crazy not to take advantage of this for college. Remember that subsidized and unsubsidized loans are different within the payment of interest. Unsubsidized loans (like the Unsubsidized Stafford Loan) offer you a 6 month grace period following graduation. There are 4 types of loan repayment options that help to provide you with flexibility when financing your loans. Standard, which is a fixed monthly payment for 10 years, Extended, standard or graduated monthly payments for up to 25 years, Graduated, payments start out small then get larger, Income Sensitive, your monthly payments are calculated to your income level.

Sallie Mae offers many loans that are there to help you pay for college. Just remember before you do anything to fill out the FAFSA form because it is one of the qualifications for most loans. Look towards unsubsidized federal loans first and do research on the requirements and what you need to do to pay them. Also look at the payments plans that are shown to you so you can pick the best one that will help you out the best.