Tuesday, 17 February 2009

8 Types of Student Loans That Guarantee More Money for Education

Last year at this time, we were frantically looking for information on the different types of student loans. Unfortunately we could find bits and pieces on various websites, but nothing as complete as we needed. This gave me the motivation to provide for others what we couldn't find. You will after reading this article know exactly what the 8 different types of student loans are and if you should pursue them or not. Now, let's start reading.

Take a quick look at the 8 different types of student loans that are available to you and your student right now. I'll share with you the positives and any negatives of each type of loan.

The 8 Types of Student Loans:

* Unsubsidezed Stafford Loans and Subsidized Stafford Loans
* PLUS Federal Loans (Parent Loan for Undergraduate Students)
* Federal Perkins Loans
* Bank Loans
* State Loans
* Other unsubsidized Loans (Stafford)
* Loans from other sources
* College Board Extra Credit Loan

You can start looking for the various types of student loans that fit your needs but you can't apply for them until you have successfully submitted your application to FAFSA. You will receive a Student Aid Report and that is what your lenders will base your loan on. Once FAFSA sends you your Student Aid Report (SAR) then you can start looking for the best student loans available for you and your child..

1. Federal Stafford Loan - Subsidized: these guaranteed government loans are by far the most popular and cost effective of all student loans you will find. They are available for both undergraduate and graduate students. It's really hard to beat these interest rates.

***Student Loans Secrets***
These rates are for subsidized loans to undergraduate students.

* 6.0% for the 2008-09 school year
* 5.6% for the 2009-10 school year
* 4.5% for the 2010-11 school year
* 3.4% for the 2011-12 school year
* returns back to 6.8% for the 2012-13 school year.

My wife recieved this loan, but they didn't give her enough so she had to find another loan from Discovery Student Loans. Our son was not granted permission for a subsizided loan and he had to get the unsubsidized loan.

January 1st of each year you must re-apply through FAFSA to received your student loan for the following year.

2. Unsubsidized Federal Stafford Loan - is a low interest rate and long term loan. At this time the rate is 6.8%. Students like my son who cannot receive a subsidized loan almost always can get one of these types of student loans. With these types of loans the interest must be paid as you go, unless you can negotiate interest payments at the end of the loan. Currently we are paying $10 monthly of which $7.92 is interest payments and the rest is applied towards the principal.

***Student Loans Secrets***

Students who are working while attending college, negotiate with your lender to make monthly payments and round up to the nearest tens. If your interest is 8 dollars a month pay 10 dollars which shouldn't be that hard. Any time you can pay on the principal the better.

3. Federal PLUS Loans for Parents - this loan allows the parent to take out the full amount for college and expenses. Parents who take on the debt of their student and make the payments will receive a low interest rate and a very nice tax break. Don't worry about how much money you do make, there is no ceiling on taxabel income for these types of loans.

***Student Loans Secrets***
You can negiotate repayment of your PLUS loan. Chose from graduation date repayments or start 60-90 days after the loan money.

4. Perkins Loans - students will find out quickly that these loans are limited, but if you are having financial difficulties this is the type of loan you should look for. You can expect competitive interest rates that are low.

***Student Loans Secrets***

Federal Perkins Loans are reported to your credit bureau. Do it right and you will have an excellent credit rating. Default or late on payments will spell trouble. Be very careful.

5. Bank Loans - if you are turned away by the federal government then turn towards a bank loan. These loans are usually a little higher and each bank has different regulations. I'd shop hard before signing on the dotted line. Some banks do offer Stafford Loans, but they are more strict on their policies.

***Student Loans Secrets***

Banks might limit their loans to full time students and repayment options will be limited. However you might find some incentives on re-payments of your student loans.

6. State Student Loans - you will need to visit your local bank to pick up an application. Most states offer a guaranteed student loan but the banks will adminsterd your funds.

***Student Loans Secrets***

These types of student loans are usually more expensive to borrow from when you compare them to federal loans.

7. Additional Unsubsidized Stafford Loan - These types of student loans are determined
by the federal guidelines and are reserved for borrowers who fall into the "independent

8. Other types of student loans - look at all your options and discuss these with your fiancial aid advisors at school. Military dependents, corporations and businesses will offer student assistance. Don't be araid to ask.

Additional Website Bonus

There is one place that will pay your tuition fees if you can repay them within a year. Affiliated with around 2000 universities, Academic Management Services offer student asstance, but be ready for some expensive rates. These funds should only be used in dire emergencies.

As you have read, each of the top 8 types of student loans offers a variety of options for those of you who need help and support. The federal government is your best option but if you don't quality you now have several options available.

Please make sure and submit your application to FAFSA early in January of each year. Once your receive your SAR then you can get down to business.

About the Author

Why are all college age parents telling their friends of college aged students to read this page? Student Loans Secrets Why are you still reading, go find out now. Need more information on which types of student loans you need?

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