Clark & Washington

Choosing the Right Student Loan

If you are looking into college and do not yet know how you are going to pay for it, then you are likely considering a student loan. It is a popular way to pay for college these days but before you sign the contract on one, you need to explore your options. There are several categories of student loans and they are not all created equally. View these types of student loans so you can better choose the right one for your needs.student loan

Federal Student Loans

Federal student loans are a very popular option and before you go after any other type, you should try to get federal aid first. There are a few reasons for this which include more flexible terms, deferment plans if you cannot pay for a specific amount of time, fixed interest rates, and more. Some may even be eligible for Income-Contingent or Income-Based repayment. There are even others that qualify for loan forgiveness for study in certain fields such as public service. You will need to explore these options based on your field of study. There are currently four types of Federal student loans:

One thing to keep in mind with Federal loans that they have limits on borrowing, except the Direct PLUS Loans, and they may not cover the entire cost of an education. You can apply for Federal loans by completing your FAFSA.

Private Student Loans

Private student loans are an alternative to Federal Student Loans. They are also a good option if your Federal loans do not cover the cost needed to go to school. The interest rates are variable which means they can change over time and cost you more money. You may need a cosigner with these loans because they have a more in depth credit check associated with them. All rates and borrowing terms are based on the lender and your credit.

Make your student loans decisions wisely and carefully. This form of debt is not dischargeable in bankruptcy. Therefore, you should seek counsel when making this decision.

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