Student loans are definitely considered as ‘good’ debts as the money borrowed is used to secure your future. This can be termed as long term investment. With the apt career option this debt can be paid off with ease. These loans can cover living expenses besides the basic tuition fees. Opting for government student loans works beneficial in more than one way as these are definitely generous and flexible.
Some Benefits of Student Loans:
Listed below are some of the benefits offered by student loans offered.
*No requirement of Good Credit:
Opting for a private loan can be confusing as these loans need a good credit history. This ensures that the repayment of the loan can be on time. The interest rate determined by the private loan depends on the credit score.
Federal loans can be applied for by undergraduate who s enrolled. Only the direct PLUS loans require a credit check. It is advisable to opt for the maximum number of federal student loans required before you plan on the private loans. All you need to do is submit the FAFSA (Free Application for federal Student aid).
*Low rates of Interest and Fees:
These federal student loans normally attract a low rate of interest. The rates are fixed and thus the repayment amount stays fixed during the loan term.
Loan which are private student loans have variable rates of interest, these tend to change when the rates of interest is increased by the Federal Reserve.
College students or high school students can qualify for private student loans eve if they do not have a good credit history. This is possible with a co-signer. You need either your parent or any adult who is willing to pay off the balance of the loan in case the student is unable to do so.
Federal student loans do not require any co-signer as these are not based o the credit history or credit scores.
*Postpone student loans:
Deferment of the federal student loan allows you to postpone the repayment of the loan for up to three years if you are facing any financial problem. This is not so with the private loans. In other words, federal student loans offer high level f flexibility.
Federal student loans offer the option of income-driven repayment. You pay only a percentage of your income every month, which means, these loans only add to the convenience and comfort. Ensure you re-apply each year so that you are sure of being on this plan.
*Forgiveness of Student Loans:
It is almost impossible to get a private student loan forgiven. This is not so with the Federal loan. This loan can be dissolved in case you have opted for the income-driven plan for repayment or even work for the government in a non-profit organization.
*Ease of Consolidation:
You have the option of consolidating the federal student loan into a single payment if you have more than one federal loan.
A little planning is what is required for the apt student loan.