The Lowdown On Student Loans

Student loans are a wonderful way to pay for graduate school. They are relatively easy to qualify for as long as you are not delinquent on any previous student loans. Usually there is no credit check, you just need to give the names of a few references which are only contacted in your lender is unable to reach you. A great option for paying for graduate school, student loans have easy qualifications except for delinquents on previous student loans. Usually no credit check occurs and only the names of a few references to be contacted in case of the lender's failure to contact you, is required.

It's surprising that half of one's student loans are subsidized. In subsidized student loans, interest is paid by the federal government and not by the borrower. Very low income is not necessary to qualify for subsidized loans as it takes income and family size into consideration with many individuals in families qualifying for one subsidized loan or the other. 

Student loans make it possible for many to attend school. Often money can be taken out to pay for other expenses other than tuition, like a new computer, books and supplies and living expenses. Graduate students sometimes quit full-time jobs or opt for part-time hours to attend school. Personal loans help cover necessary living expenses. Most personal loans however, require credit check unlike traditional student loans.

Millions of students benefit from student loans without which school would be unaffordable. But certain factors need to be remembered before signing the paperwork. Applying and getting approval for student loans will make it appear as debt on credit report, even if indicates one is not in repayment status. It can nevertheless affect credit score adversely. For example currently the money one makes may not be sufficient to pay the monthly-anticipated payment on the loan after graduation. The credit score will then reflect too much debt compared to current income. For the credit agencies the fact that one is currently in school and after graduation will be likely to earn more and have no more problems with repayment of loan, is not considered. It can affect the ability to apply for any other loan while still in school.

Sallie Mae Servicing lists out several serious implications on delinquency on student loans:

--Default can be reported to all national credit bureaus making it likely to affect financing of any future purchase like a home or automobile.

--The cost of the loan can increase with late fees and other charges.

--Entitlements may be lost for deferment or forbearance options.

--Many repayment options can be lost like income sensitive or graduated repayment.

--Eligibility for future student financial aid may be lost.

--Wages can be garnished.

--IRS refunds can be seized by the Department of Education.

--One can be sued for the balance on the loan.

(Source: http://www.salliemae.com/) 

Therefore first one should be aware that student loans don't just disappear unless they are repaid. Fortunately the options are many. One is to stop attending due to a break in education or on graduation, to start a grace period. Six months follow before the estimated first payment is scheduled to start. In the grace period the interest rate is lower than during the repayment period. The grace period gives you a chance to find a job to begin payments for student loans.

Most students have more than one student loan, with usually one for each school year. If you qualify for subsidized student loans, the government pays the interest on the subsidized student loans. One could have half of his loans subsidized and the other half, not. Consolidating student loans can enable you to save yourself the efforts in separate payments for each loan and money as your loans are all combined into one. Consolidation during the grace period saves you substantial amount. For loans amounting to over $40,000, your payments can stretch to over 30 years.

Several other repayment options can be found by going to http://www.salliemae.com/. The best advice one can get is to research options thoroughly for the payment plan that would work best for you.