Feb 09

Federal School Loans Vs Private Loans – Which is Better?

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Most people need some sort of outside funding to help pay for their college education. When looking for student loans, you have two choices. You can apply for federal loans which are backed by the government or you can seek money from a private lender.

Each method comes with benefits and drawbacks, so it’s hard to say which one is better. This article will explain the benefits of each and help you decide which is right for you.

Federal School Loans

Federal school loans are government regulated. This means that the lenders have to abide by strict rules when it comes to repayment terms on your loans.

For example, interest rates on federal school loans are set at a ceiling by the government and the lender cannot exceed that rate. They can go lower than that, and in some cases they do in order to stay competitive with other lenders, but they must stay below the max. This is good for the borrower because when they take out a federal loan they know what to expect with their interest rate.

Federal loans are typically fixed rates as well, which means the interest rate is set at a specific percentage and won’t change for the entire life of the loan. Fixed rates mean there won’t be any surprises in your payments from month to month. They should be almost exactly the same each month.

The interest you pay on your loans each year on federal loans is tax deductible, too. If you owe a lot of money, you can claim a nice chunk of your payments as deductions.

One final advantage of federal school loans is the flexibility of repayment you’re allowed. If you’d like you can arrange for your loan to be a 10, 20, or even 30 year loan, which will lower your monthly payments and make them more affordable.

Private School Loans

Perhaps the best part of private school loans is the ability to apply for one whenever the need arises. With federal loans you have to fill out the required paperwork ahead of deadlines in order to receive a loan for a given semester. When requesting private loans you can apply at any time.

Another great thing about private loans is they can be used for fringe school expenses, such as books and transportation. Federal loans must be applied to specific expenses, such as tuition and room and board, but private loans can be used for just about anything not covered by federal loans.

Private loans are not need-based, either. This means that no matter your or your parent’s financial situation, you are eligible for private loans. Financial aid and many federal loans consider your financial need before you receive money, and sometimes the amount is reflective of your need. Private loans, on the other hand, will give you the amount you request, provided you meet their credit check criteria.

Which is Better?

Which type of loan is better depends entirely on your personal situation, however, knowing the facts will help you make the best choice for you. This article addresses some of those facts but be sure to discuss the options with your school financial aid office as well.

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Dec 18

Stafford Student Loans: Deriving the Easiest Repayment Process

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The old time has been passed when the students had to consider about their parents income before going to college. But now, the students don’t need to think. They can go to college through federal student loans, which can help the students pay until they observe under graduate, graduate or post graduate. There are numerous sorts of such loans, which are availed simply by the students. The Stafford Student Loans are just one of them. Stafford Student Loans are granted fixed interest rates in the form of subsidized Stafford Student Loans and unsubsidized Stafford Student Loans. Attaining the subsidized Stafford Student Loans is no complication to the students because the federal government reimburses for the interest charges of the loan during the completely period while the student is studying in school until grace period of 6 months after completion graduate, under graduate or post graduate. There are few definite formalities for the subsidized Stafford Student Loans, and one of these is the family revenue. Unsubsidized Stafford Student Loans can be attained from a bank or credit union, or directly from the department of education. The interest rates of unsubsidized Stafford Student Loans alter class after class of the student. These rates are still very lower than the private student loans. The student who is unable to qualify for the subsidized Stafford Student Loans then he/she is to be enabled for the unsubsidized Stafford Student Loans. In this matter interest rate due on the loan builds up from the day the amount is paid out until the day that the loan is paid off and interest charges can boost at rapidly. Striving to take out interest payments can be a problematical business, especially if you have a sequence of diverse loans cut out over 2 or 3years in college, because, while interest is quoted as an twelve-monthly shape, it is intended monthly and adjoined to the loan standard as you go along with interest in subsequent months being charged on the increasing shape. Stafford Student Loans can be used assorted impulses such as reimbursing tuition fee, institution fees, living expenses, medical insurance costs, books and supplies, transportation, amusement, and purchasing computer that is the that is the essential thing for the modern education. Stafford Student Loans basically carry low rate of interest to compare private student loans. Stafford Student Loans can be paid back within 10 or after completion education or after receiving job.



By: Andrew Peterson

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Dec 14

Student Loans: Cut Monthly Payments on your Student Loans by Up to 42%

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If you’re a graduate or college parent with any outstanding federal student loans, you may be able to lower your monthly student loan payments by up to 42% just by consolidating your parent or student loans. When you consolidate your college loans, you may be able to extend the repayment term on your parent or student loans by up to 20 years. With that longer repayment term, since you have more time to repay, the amount you have to pay each month will typically go down.

NextStudent, a leading Phoenix-based education funding company, offers a student loan consolidation program with no application fees, no processing fees, and no credit checks. By consolidating your parent or student loans, your monthly payments could go down by up to 42%.

Here’s an example: Estimated monthly payments on a $75,000 NextStudent Federal Consolidation Loan fixed at 7.25% and repaid over an extended term of 30 years are $512, versus estimated monthly payments of $879 on a $75,000 Federal Stafford Loan issued at 7.22% and repaid over 10 years — a 41.8% reduction in monthly payment amount. (Your actual payment reduction may vary and will depend on the terms of the student loans you’re consolidating.)

Replace Your Variable-Rate Student Loans With One Fixed-Rate Student Loan Consolidation

If you took out your Federal PLUS Loans or Stafford Loans prior to July 1, 2006, those student loans are subject to variable interest rates that will adjust every year. So when interest rates rise, your monthly student loan payments may also go up. Student loan consolidation puts an end to rate increases and rising payments.

NextStudent’s student loan consolidation program gives you the security of a fixed interest rate. By consolidating your federal college loans with NextStudent, you’ll replace your variable-rate college loans with a fixed-rate student loan consolidation loan and lock in your new monthly payments, so you’ll never have to worry about interest rates rising and leaving you guessing about your monthly payment amount.

Make Repaying Your Student Loans Convenient and Hassle-Free with Student Loan Consolidation

If you have multiple college loans in repayment and you’re dealing with the hassle of multiple bills, multiple due dates, and multiple monthly payments to multiple lenders, a student loan consolidation could help make your repayment easier to manage.

With a student loan consolidation program, you can bundle all your eligible federal parent or student loans into one single consolidation loan with just one monthly bill, one lender, and one monthly payment that’s fixed for the life of your student loan consolidation.

Apply in Minutes to Consolidate Your Student Loans

Typically, you can apply for a student loan consolidation in minutes. Just visit an online student loan consolidation lender or make a quick phone call to the lender of your choice. It’s fast, easy, and free to apply, and there are NO fees, NO credit checks, and NO co-signers required.

There are also no prepayment penalties. When you consolidate your federal parent or student loans with NextStudent, you’ll never be charged extra for paying more than the minimum each month or for paying off your student loan consolidation early.

Student Loan Consolidation for Private Student Loans

If you have private student loans in addition to (or instead of) your federal student loans, you won’t be able to consolidate your private student loans under the federal student loan consolidation program. But you may be eligible to consolidate your private loans separately with a Private Consolidation Loan, which offers the same convenience of a single consolidated loan for your private student loans.

NextStudent believes that getting an education is the best investment you can make, and we’re dedicated to helping you pursue your education dreams by making college funding simple. Learn more about Student Loans, Private Student Loans and Student Loan Consolidation at NextStudent.com.



By: Jeff Mictabor

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