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- Paying for College
How to Find Best Student Loans
Searching for the best student loans can be a problem to both the student entering college and his parents.
What are the things to consider in choosing the best student loans? Is the student the only one who will be paying for the loan or the parents meeting him halfway? If so, how much amount of loan will they apply for? Are the parents interested in obtaining a loan for the purpose of meeting their child’s educational expenses?
A student should not abandon the idea of borrowing cash from a relative or perhaps a parent for an educational assistance. He should have a serious talk with them before exploring other loan options. A loan obtained from a parent or relative could have easier terms of payment. He just needs to have a clear plan and schedule about repayment.
If borrowing from relatives is not an option, federal student loans appear to be the best choice. They have lower interest rates and specifically devised to meet the financial needs of students.
Perkins loans are one of the best for students as it has a low interest of 5%. Proceeds of the loan can be obtained from the school where the student is enrolling. Further, repayment is up to ten (10) years. Perkins loans gives priority to students having the most need of loan assistance.
Stafford loans are at 4.5% interest rate for the undergraduate and offer 6.8% interest for graduate students. Any student can take advantage of this loan. They do not need to show proof of monetary aid need.
Parent Plus Student Loan is meant to help parents meet the educational needs of their child in college. The interest is fixed at 7.9% This is a good choice because parents can easily pass the credit standing evaluation. Requirements are simple enough. They must be US Citizen; a parent of a child enrolled in a university or college and has good credit standing. Parents should keep in mind that this is their loan. Therefore, the parent is responsible for the loan payment.
A Free Application for Federal Student Aid (FAFSA) form is required to be submitted by the student so he can take advantage of the federal student loans. The earlier a student gets to submit the FAFSA form, the better. This will help him maximize the financial aid package that he could possibly get.
Private student loan should be the last option. Though the loan can be obtained in a matter of days, they give varying interest rates. This will add up a tremendous amount of interest to the principal loan.