Student loans are those that can be secured to aid the students while they are securing their college degrees. Such loans have different types. There are private loans, federal loans (government loans) and medical student loans. There are also graduate loans and parent student loans. Here are some basic differences.
Private student loans are issued by banks and private lenders. This normally has higher interest rates than that of government loans. This is usually applied as a supplement for federal loans. Such loans can cover any education related expenses like computers, books, tuition fees and balance previous semesters.
Federal loans, on the other hand, are those that are by the government. The amounts are usually limited but the interest rate is also quite low. In the same manner, this type of loan the amount is not determined by the borrower but of the lender. Students are also required to fill out Free Application for Federal Student Aid (FAFSA). Federal loans also require that the students are in full time or at least half time enrolled. If a student falls from half time, the loan will be given a 6 months grace period, but this can only be done once. There will be no grace period for the next time. If the student goes on a half time status, the payment is then deferred.
Medical student loans usually grant higher amount because medical courses have more expenses and have higher tuition fees. Nursing and physical therapy courses are also included in such. This involves the equipments needed for their studies.
Graduate loans are for those that are taking their second courses or master degrees; this can also be available for multi-course and licentiate programs.
Parent student loans are those that are made through the parents. This is when parents are co- signers of the loans. The loans are sometimes secured against the homes; this means that the loans will have lower interest rate.
Student loans are usually paid after the students leave school (either by graduation or voluntarily leaving). The normal grace period is 6 months to one year. Parent student loans are also paid after their children are finished with college. The interest rates vary depending on the terms, some are in an Annual Percentage Rate or APR. When applying for student loan make sure that you cover terms and agreement thoroughly because after college you are still responsible for paying for them.
