Low Interest of being granted a college loan

Low interest college loans are federally assisted loans available to college students to pay for tuition in the USA.

College loans are available from banks and other private sector lenders. But these are not an option for many students. Their credit history is inadequate or poor and their income is too low.


Even if students are eligible for commercial loans, they typically first explore the possibility of being granted a college loan by the federal government since they come at a lower cost. Their other advantage is that students may choose not to pay the interest bill while they are in college; they can elect to defer the interest cost until they graduate. If that option is selected, the interest cost is capitalized and added to the outstanding loan balance.

College loans are structured as either a Stafford loan or a Perkins loan. Stafford loans are the most common. Perkins loans are only available to students confronted with significant economic hardship. Students must be either a US citizen or permanently reside in the USA. Some students that are not U.S. citizens may also be approved.

Stafford loans are designed to assist students that have some income but cannot present a satisfactory credit history. A student's credit history is not generally a barrier to these loans, except if the student has defaulted on a past loan. Other requirements include the student's class load be greater than fifty percent of the academic week and that grades remain satisfactory.

Stafford loans are classified as subsidized or unsubsidized, with the interest rate on subsidized loans being lower. For the 2009-10 academic year - July 1, 2009 to June 30, 2010 - the interest rate applicable on a Stafford loan is 5.6 percent subsidized and 6.8 percent unsubsidized. All graduate loans, subsidized or unsubsidized, carry a 6.8 percent interest rate. Some students may be eligible for lower rates.

A Perkins loan is granted only to students facing significant economic hardship. The cost of these loans is lower than Stafford loans. For the 2009-10 academic year, the loans carry a 5.0 percent interest rate.

A Perkins loan is granted by a college, not a government agency. In other words, the lender is the school. The US Department of Education provides funding directly to some, not all, colleges for distribution as a Perkins loan. Colleges that receive federal funds for Perkins loans generally augment those funds with college funds. The college has sole discretion in deciding students that will be allocated a Perkins loan. The loan monies are first deployed to cover tuition costs. The college pays the balance to recipients on a progressive basis through the year.

Students apply for a federal college loan by submitting a Free Application for Federal Student Aid (FAFSA). In addition to being the application for federal financial aid, the FAFSA is also used to apply for aid from other sources, such as a student's state or school. According to the official Federal Student Aid website, online applications must be submitted by midnight central daylight time, June 30, 2010.

Federal Student Aid cautions students to pay close attention to deadlines! It considers a deadline to have been met if the FAFSA is submitted successfully by that time. Federal Student Aid warns however that other institutions involved in student financial aid process, such as state authorities and schools, may not consider a deadline as having been met until documents are received, not merely submitted

Once the FAFSA application is processed, Federal Student Aid distributes a Student Aid Report (SAR) detailing its assessment of the student. Following the SAR, students are mailed an award letter outlining the types and amounts of aid they are eligible to receive.

In addition to federally funded loans, students may also be eligible for commercially-based, private sector student loans. These are useful as top-up loans to supplement monies from federal college loans, grants, scholarships and work study. Private loans can be used to pay for non-tuition, as well as tuition, costs. Private student loans are not needs-based. A credit worthy student is eligible to borrow up to the total cost of the proposed education program. Students applying for a private loan are encouraged by the lender to apply with a co-signer - usually a parent - since this will improve the likelihood of approval and also lower shave a little off the interest rate.

Way Towards Better Future Loan Repayments

In the United States and also for some countries, loan repayments usually happen after college education of students. This is usually called college loan repayments. Since college education is expensive in some countries, some parents cannot afford to send their children to college. Some students opt to study and work at the same time to finance their studies. Some lucky parents, especially those with good credit standing were able to loan for their children's college education.

There are programs for paying loans offered by financial institutions and government institutions. Some loan repayments charge fresh graduates more than fifteen percent of their first monthly income which is not fair for them. While for some parents, their loan repayments should not exceed forty percent of their income.

There are private financial corporations that have loan consultants and online calculators that will help them to give the students and parents' option for repayments. The loan consultants are employed by financial corporations that can advise the students and parents about college loan and loan repayments. Financial consultants are the best persons to consult before entering any loan engagements and to know better about loan repayments. They are highly-professional people that know every corner of loan business. Though some parents would turn to freelance financial consultants employed by financial institutions, there might be some biased decisions on the financial institution if the parents will turn to their advice.



In college repayments for loans, there are types of payment options that student and parents can choose. There is a standard repayment program which gives the student the convenience of ten year period for paying the loan. Another type of repayment is a graduated repayment program where the student will pay small amounts only during the first year of their employment after graduation, and then an increase in the interest rate of the loan will be applied as their salary increases also. Repayments for loans will now be shouldered by students after getting a job. There is also an extended repayment program that gives students 20-30 years for them to pay their loans. But then, the student should think of the interest that is increasing every year with this kind of repayment. Lastly, there is an income sensitive repayment program for students where the payment for the loan is based on the monthly payment of the student. With these kinds of loan repayments, paying schemes will not be a burden to borrowers.

Graduate Best Option For Attaining Higher Student Loan

In the past, any 4-year college degree was enough to let you get a good decent job in the field of your preference, but times have greatly changed. Today, you can apply for any work in your field once you got your Bachelor's degree, however, if you want to attain higher levels in your line of work, the need to take up an advanced degree is necessary.



Likewise, in some professions, particularly those in medicine and law, they always require quite a few years of graduate study. When it comes to financing a graduate school, most students agree that the graduate student loan is still the best way to pay for their schooling and reach their dreams.

First of all, graduate schools are schools for college graduates who wanted to pursue higher education such as the master's degree, Ph.D., and other postgraduate programs that will lead them to a more advance level of learning. By finishing a postgraduate course, the graduate can look forward to a more rewarding career.

Furthermore, these kinds of schools are not really an independent institution. In fact, it is common for big universities to offer post-graduate courses to working executives and other professionals. Then again, like with the bachelor's degree, the person who will enroll in the graduate class will have to pay thousands of dollars which is quite hard on the pocket. So, it's really a good thing that graduate student loan is being offered by various lending institutions nowadays.

There are lending companies who approve paying for full tuition fees, provided that as payment for the loan, monthly deductions from the student's salary shall be in place. The interest rate that comes with this payment set up is usually minimal.

There are also other companies that also agree to pay the tuition fees for the entire schooling period and in return, the student must work for their company for a couple of years. Other graduate students simply apply for the university's own student loan programs and then pay back the school through serving as one of their teachers for a few years.

The standard requirement to be eligible for a graduate school loan include: he must be a citizen and a permanent resident of the country where he will take the post-graduate course. In case the student is not a permanent resident, then a co-borrower will be required. Nevertheless, the co-borrower must be at least 18 years old, a bachelor's degree holder from a reputable school, and must have a good credit rating with any lending companies or bank.

Moreover, the advantage of having a co-borrower who is reliable enough to be granted with the credit is that, even if you are not creditworthy, you still have a chance to get the loan. Once you have presented all the requirements and was approved, the amount that you can borrow starts from $1,500.00 up to the ceiling limit of $75,000.00. As for repaying the loan, it can be automatically debited to the lender's bank accounts or straight to the university.

At any rate, when you're looking for a graduate student loan, one of the most important things to consider is the rates offered by various lending companies. By doing so, you will be able to compare and then decide which of those companies offer the most affordable fees.