Your eligibility for federal student loans is determined by the results of your Free Application for Federal Student Aid, or FAFSA. Federal loans may be subsidized or unsubsidized based on student need. Take advantage of federal loans if you are eligible because they have lower interest rates than private loans and the conditions are more flexible.
Private student loans are also called alternative loans, because they are an alternative to federal loans. While federal loans have more flexibility and lower interest rates, they have tighter borrowing caps. Private lenders have more borrowing options for students who still need money. There are a lot of lenders, each with different rules, rates, fees and benefits. Do your research to find the best lender. Contact your college’s financial aid office for a list of top lenders.
Private loan rates fluctuate with the economy and vary from lender to lender. Each student lender sets their own interest rates and chooses their own benefits. Private lenders offer more money than federal loans. Most private loans calculate their number similar to federal loans, where the borrowing limit equals the cost of attendance minus other financial aid. Private lenders, however, usually require students to start paying immediately after the first disbursement. Investigate your private student loan options closely to make sure you are getting the best rate possible. Remember to always read the fine print.
Consolidating loans can simplify your student loan repayment process because they combine several payments into one. Interest rates on consolidated loans are often lower than loans that are not consolidated. Federal loans can be consolidated during repayment, grace periods, deferment, and forbearance. Loans cannot be consolidated while the borrower is still in school. The consolidation rate is fixed for the life of the loan, which protects the borrower from possible rate increases but does not allow them to benefit from possible decreases. There are no application fees or prepayment penalties. Still, investigate your options carefully to not lose out on borrower benefits.
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April 20, 2021
by Izzy Hall
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April 14, 2021
by Izzy Hall
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April 13, 2021
Let’s say you’ve made it. You are enrolled in college, or have been for a year or two. You’re receiving some financial aid, or even a scholarship, but something’s missing. It’s money. No matter how generous the package you’re receiving is, there’s always one more book to buy, one more activity fee, one more dining hall bill… [...]