Getting educated and knowledge is the basic trait of the human race that makes it progressive and civilized. From the beginning of mankind to now, education and learning have been a primary concern of humans. The success and technological advancement of the present time speaks volumes about the importance of education. But the collateral bitter truth is that, with the advancement of our society, education has become costly, especially the higher education. According to a report by UNESCO, about 1 billion people of the world are uneducated and lack of fund is one of the major reasons for that. But you don’t need to worry much. With the provisions for a student loan, education has become easily accessible nowadays.
What is a student loan?
A student loan is a kind of loan which has been formulated to provide funds for the higher education of needy students. It generally includes tuition fees, books and other necessary supplies and accommodation expenses.
How does the student loan work?
The lower rate of interest and higher payback period are the main components of student loan.
- Lower costs: Student loans are low-risk loans owing to their lower rate of interests. They are controlled by the government of states to help the students. They have the longer payback period.
- Easier approval: Student loans don’t depend on credit scores and income statements. It’s easier for a student to get education loans even at no credit scores.
- Benefits: The best part of a student loan is that generally, you don’t need to pay the interest till you are in school. Another benefit is that you won’t be stressed during the unemployment period.
What are the types of student loan
At the primary level, there are 2 types of loans.
- Federal student loans: It is provided by the government.
- Direct subsidized loan: It is based on financial and economic needs.
- Direct unsubsidized loan: It is an indirect loan in which your school asserts how much financial aid you want based on your profile.
- Direct PLUS loans: It is a credit based loan facility formulated for parents and professional or graduate students.
- Private student loans: They are issued by a bank or other financial institutions.
- Private student loans: It is for students where parents are the cosigner.
- Parent loans: It is given to parents for their wards.
How can you apply for a student loan?
It is very easy and feasible to apply for a student loan. You just need to follow these simple steps:
Federal student loan:
- Visit your financial aid office. Gather pieces of information about types of aids, grants or scholarships.
- Fill up the Free Application For Federal Student Aid (FAFSA).
- Wait for the approval. Once your application is approved, you will start receiving financial aid.
Private student loan:
- Go to the lender’s website. You can visit AAA Credit guide to know about some of the best student loan lenders.
- Check interest rate, payback terms and durations and other benefits and choose as per your need.
- Apply by visiting the website of the loan lender of your choice.
- Assign a cosigner.
- The loan lender will communicate with you further and follow accordingly.
This loan guide has been developed to ensure that you get the best loan for your education and prosper in your future.