When a student or parent sets out to obtain a loan and/or financing a college education there are a many different sources they can go to in order to acquire the funding necessary. However, there are two different categories of loans which are either federal loans or private loans.

As for federal funding for college, in many cases it is much easier to get the financing if you fit the criteria set in place. By far, one of the most popular federal student loans is the Stafford loan. There are two types of Stafford loans which are the federal family educational loan and the William D. Ford federal direct loan. The process of obtaining a Stafford loan is through the student filling out a federal student aid application, then once approved they will sign a promissory note on the loan.

The only real difference between the two types of Stafford loans is where the actual funding is coming from. For a direct loan, the funds are coming directly from the federal government as for a FFEL loan, the funding comes from either a bank, credit union or another participating lender in the program.

There are also a couple more that should be mentioned in this article and those are the Parent PLUS and Perkins loans. First, the Parent PLUS loan is designed for parents in need of assistance for paying their child’s college fees. This loan basically will fill in any gaps that the parent needs in order to cover all the college expenses fully.

The Perkins loan is basically a student loan which can be applied for at the college or university financial aid office which usually has a very low interest rat, but has a maximum loan amount of around $4,000 each year for students. They are federal fund and can be added to other types of funding. There are late fees and fees for skipping payments on the Perkins loan as well.

These loans and more can all be inquired upon at your selected college or university.

Credit history may not be as necessary if it is necessary at all in obtaining these types of funding options. As opposed to federal student loan funding, there are many private lenders willing to provide assistance for college funding as well. However, if you so decide to take the private lender route for financing a student loan, it is important to remember that most will need a bit of a credit history from the potential debtor and will most likely require a co-signer on the loan if the student with not much credit history at all is attempting to obtain the financing.

Federal funding for college students who need the financing, as well as parents is very available for anyone who has a need for such funding and it would be a good idea to look at all the options available in order to compare interest rates, fees, and more as these student loans will be around for a while after college as some loans will begin the payment schedule immediately during college like the Parent PLUS. Other repayment schedules will begin after 6 months for Stafford loans and 9 months for Perkins. So it would be a good idea to get all this information first hand before making any quick decisions about your college student loans.

By: S. Michael Windsor

Many people face great financial difficulties when it comes to funding college education. A feasible option for such people is college loans. Individuals in the U.S. have been given a chance to continue with their studies, with the help of college loans, even if their earnings are modest.

It is advisable for people to give due consideration to their expenses if they are interested in covering them with college loans. There are various kinds of college loans available. However depending on their expenses, they will have to choose a loan that suits them the best. A majority of students take college loans to pay their tuition and course fees. Part of this loan can also be used to pay for room rent, supplies, and books.

People can opt for federal student loans, which is the most usually used and can be of two types, subsidized and unsubsidized. In case of subsidized loan, the government, not students, pays interest on the loan. However, these loans are granted to only those individuals who are already facing huge debts. In case of unsubsidized loans, interest is paid by students and is not delayed until after the student graduates.

Private student loans are another type of college loan that can be provided to any person who has a good credit score; it can be used for any expenses. It is important for students to know that this type of loan is unsecured. This implies that it needs no collateral, but instead has very high interest rates.

Parent loans are also a type of college loan, which can be obtained by parents, and since they have good credit, the payoff and the interest rates are reasonably lower.

College loan consolidation is made use of to consolidate all student loans. With the help of college loan consolidation, individuals can pay off to only one lender. Students can opt for consolidation regardless of their credit rating. When applying for a college loan consolidation, it is very necessary for students to research and then choose a reliable company to handle their monetary troubles.

If students are not able to pay their monthly installments, they can also consider a college loan deferment. This means that they get a suspension of payments under special circumstances, such as if they are unemployed or suffering from financial hardship.

By: Thomas Morva