Sunday, October 31, 2010

Federal Student Loan Vs Personal Student Loan

It is often mooted over the topic that which of the two loans for student either Federal Loan or Personal loan is the best and compatible, keeping everything in mind. No doubt, both the loans are for the same purpose but if each of the two is seen with an eye of a student, Federal loan can be considered as the best. Since the Federal loans are funded by the government and it has the merit as a basis, so it is more affordable for the common people. In fact, it is seen that the local or personal lenders fetch the students, unexpected economic tensions to the students and it hampers their study.

Also, for the Federal loan the students have to qualify for the written test and the sanctioned amount for the education purpose may depend upon the credit score of the students. Again, the interest rate and the monthly payment amount are very less as compared to the Personal loans and, also the repayment time starts when you are in an earning mode. There is no denying the fact that Federal loan is secured and money saving scheme launched by the government whereas the Personal loan garnish everything from the bearer if you are not capable of repaying the loan.

The report goes that most of the loan experts do not recommend the Personal loans because of its hefty repayment criteria, comparatively higher interest rates and the difficulties faced by the students in case of non-payment of the loan. Apart from these, the local loan lenders who give the Personal loans, do not keep their words even in written and do not understand your financial crunch. It is better to decide over taking the student loans after consulting the loan experts and reading the various loan reviews available on the net.

Know More About Different Types of Student Loans

If you are a student and searching for education loans, you may get a number of available loans options. In fact, there are many types of loans for a student going to attend the college but it should be kept in mind that what type of loan you are in need of. Basically there are two types of student loans namely Federal student loans and Personal student loans. There is no denying the fact that both the above mentioned student loans stick to different eligibility options and repayment schedule but you can chose the best depending upon your financial requirement or status.

Further, Federal Loans may be classified as Federal Stafford loans, Federal Plus Loans and Federal Perkins Loans. Federal Student Loans may be subsidized or unsubsidized depending on the student’s current status but it can be taken from the government or any financial institution. It is a long term loan and has comparatively lower rates. Federal Plus Loans totally depends on the student’s credit score and repayment time starts just after he graduates. It is low-interest rate loans. At last, Federal Perkins Loan is given to the very less earning people and it has the least interest rates. In fact, this loan, if not paid, may damage the credibility of the concerned person.

Personal student loans are non-government loans that are on the discretion of the student. It is generally taken when the student fails to qualify for the Federal loans and it is not advisable to get the personal loans as it has very high interest rates and the lender may garnish the whole income if you are unable to repay the loan. It needs a co-signer and hence, it is recommended that the student getting the Personal loans must reconsider their decision so that they may avoid the unexpected risks involved in these loans.

What is student loan consolidation?

When it comes to education in the western countries, it serves you the best path to success but it might be a herculean task for you being a student to manage the fund needed for the study purpose. There is no denying the fact that when you are financed for education loans from the various lenders, the interest rates and the monthly installments may add to your miseries. It has been seen often that the students find it much hard to pay the monthly payments to their lenders at such a higher interest rate.

So,you have the facility of consolidating your loan to reduce the monthly payments. Student loan consolidation is a program of refinance your existing loans to a single loan keeping your paying ability so that you are able to reduce the monthly payments and have huge savings. No doubt, it has been seen that this program ensures saving of hundreds of dollars monthly and thousands of dollars on the whole loan. The main aim of the student loan consolidation is to reduce the financial burden of the students who are under stress and worry more about the loan than that of the study.

The report goes that there are a number of financial experts on the internet who may help you out of this loan difficulty so that you are able to concentrate on your studies. There is no problem of any paper work, just go and recombine all your loans to a single loan at a fixed interest rate. The government has also recommended the finance companies for the same. You are ought to get the reduced monthly payment and pursue your studies with no economic stress at all. This program also puts extra cash in your wallet in no time.