For many individuals in this country paying directly out of pocket for their college education is not a reality, so they need to look into financial aid packages, personal student loans, or just a personal loan.
Personal student loans are normally ideal for college students because unlike many of other types of funding given from financial institutions. With these loans you do not have to start to repay the loan until six months after you have finished your education. This allows individuals a chance to find a job after they have graduated. The down side to this type of loan is they are often concidered on a first come, first served basis, because of the limited number of government funding available
The federal loan is the most frequently found student loan. This type of loan has a smaller limit, so they are normally used for paying tuition fees. They normally have really small interest rates, and are good for establishing credit because all payments and money owed show in the student's credit score. More often than not there is a six month no payment period, so that from after the time the student has become a half-time attendee or graduates they will not have to start payments on the loan for six months. These federal student loans are watched very closely by the government. You can obtain this loan through the school's financial aid program. Just know that with this type of federal loan you might not have to start payments for six month but the interest begin as soon as you graduate or become a part-time student.
Private student loans are not regulated by the government and are normally given to people who need more than the regular amounts given to standard students. Private loans have the highest limits but also come with the highest interest rates. A private loan is a loan the parents can get instead of the student but if the parents do get it, because it is not in the student's name the interest begins to accrue immediately. Private student loans can be obtained through institutions or private loan companies. If required a student can have a private loan and a federal loan at the same time. If a student was going to go to a prestiges university and federal funding wasn't enough they might look into this type of loan.
Having bad credit doesn't make getting a student loan impossible, but there are many things that you will want to keep in mind before you apply for one. Like for a bank to offer you the funding you will have to pay unusually high interest rates. This is because the financial institute feels they are taking a greater risk lending you money then someone with a good credit score. Banks do not consider any reasons why your credit might be bad they just feel that if you have bad credit, then you do not know how to manage your money and will be a bigger risk of defaulting on your loan.
Lastly if you are considering on getting a student loan to help pay for college, you should take into consideration that just because you can borrow more then you will need, it might not be a good idea because when the time comes to repay your loan you will have bigger payments. Bigger payments mean that you will have to get a better job right out of college which might not be that easy since better jobs usually require experience to go along with the diploma.
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