Types Of Loans For College Students

Despite the different types of loan that is made available for college students, many are not aware of it. It is of great importance to have knowledge of the right student loan to go for when the needs arise.

Many students that intend applying for a loan tend to narrow their focus on federal student loan options, meanwhile, there are so many different student loans with eligibility requirements, the amount one can borrow and interest rates available for students that they can make their choice from.

From research made, we realize that many college students may not even be aware of these loans available at their disposal, so today in this article we will be introducing different types of student loans available for college students both government and private.

Loans For College Students image

Different Loans For College Students

Below here is a list of Different Loans For College Students which you can apply for free without stress.

Direct subsidized federal loans

Direct Subsidized Loans which is also known as Stafford loan, are federal student loans borrowed through the Direct Loans program that offer undergraduate students a low, fixed interest rate and flexible repayment terms.

With subsidized debt, the education department will cover the interest that has increased over time on your loans while you are registered at least half-time in school.

College students that are in need of this loan must show that they are in financial need for them to be able to benefit from this federal loan. whichever school that you have been admitted will then give a detailed amount that you are eligible to borrow in your college ward letter.

Also Read: Best Student Credit Cards for Travel will also interest you.

What Makes Direct Subsidized Loan Unique
  • Interest rate: Undergraduates 3.76%, Postgraduate 5.31%
  • Max borrowed: Undergraduates $5,500 to $12,500, Postgraduates, $20,500
  • Loan fee: 1.069%
  • Terms: 10 to 25 years

Direct Unsubsidized Federal Loans

Direct unsubsidized version happens to be the opposite of subsidized federal loan, here students are responsible for paying all of the interest that adds up in the loan until the loan balance is paid off. the Direct Unsubsidized Loans which is also called the “Unsubsidized Stafford Loans” are low-cost, fixed-rate federal student loans available to both undergraduate and graduate students.

But the good thing about this loan is that everybody is eligible for this loan,  it is available for both graduate and professional students.

Direct Unsubsidized Loan Uniqueness
  • Interest rate: Undergraduates,3.76%, Postgraduates, 5.31%
  • Max borrowed:Undergraduates – $5,500 to $12,500, Graduates – $20,500
  • Loan fee: 1.069%
  • Terms: 10 to 25 years

Direct Consolidation Loans

The Direct Consolidation Loan is one that allows you to consolidate (unify, combine) different federal education loans into one loan. This means that when paying back it will be in a single monthly payment instead of multiple payments.

All your payments would also likely be lower than your past loans, and your repayment period can be extended to 20 years.

Even as a consolidation loan is convenient, it is not right for everybody. It might give a borrower access to income-driven repayment options, and it can erase another’s progress toward Public Service Loan remission.

But it is advice-able that before you decide on consolidating, it’s of utmost importance to consider your own condition.

This is What Makes Direct Consolidation Loan Unique
  • Interest rate: The weighted average of the interest rates on your existing loans
  • Loan fee: n/a
  • Terms: Up to 30 years

Parent PLUS Loans

The parent plus loan is a type of loan that is designed for biological, stepparents, adoptive parents to support their undergraduate wards that is dependent on them.

The major difference between Parent PLUS loans and the other types of loans is that parents are required to make payments while their children are in school, although they may demand deferment during the loan application process.

And for the records, the government does not offer a way for parents to transfer a PLUS loan to their children, but some private loan lenders do allow parents to refinance a Parent PLUS Loan in a child’s name.

What Makes parents PLUS Loans Unique
  • Interest rate: 6.31%
  • Max borrowed: The cost of attendance minus any other financial aid
  • Loan fee: 4.276%
  • Terms: 10 to 25 years

Direct PLUS Loans

Direct PLUS Loans are federal loans that are available for graduate or professional students, and parents of dependent undergraduate students can make use of it to help pay for college or career school.

These loans can also help to pay for education expenses not covered by other financial aid.

Direct PLUS loans, whether they are for students or for parents, they are unique because it requires the applicant to go through a credit check. For the records.

The loan pattern was specifically built for graduate and professional students who have had more time to improve their credit score, not like those undergraduates that are just entering the college, and have no idea about credit card.

The uniqueness about Direct PLUS Loans

Direct PLUS loans give their borrowers until six months after they finish or leave school to begin making payments of their loans.

  • Max borrowed: The cost of attendance minus any other financial aid
  • Interest rate: 6.31%
  • Loan fee: 4.276%
  • Terms: 10 to 25 years

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