Can you think of continuing to your higher studies without borrowing student loan? Well, in this situation of economical disturbances, managing finance for education has become quite troublesome for many of financially poor but brilliant students. Moreover, a good education ensures a better future and you cannot simply avoid being educated at any cost. So, you are left with the option of education loans. Therefore, knowing about the matter in details before going for borrowing loan for completing your studies is very important for you, so that you can avoid future complications. Okay, let me help you with this.
Student loan is also known as financial aid, which is made to help out the students bearing their education expenses.
Education loans primarily can be of two types, such as:
- Federal loans
- Private loans
Well, most of the time people confuse with which of these types to stick. Let us discuss the difference of these two types of education loans, so that you make your decision in a better way.
• Federal loans are issued by any government organization, whereas private loans are issued by any organization rather the government.
• Federal loans are mainly of three types, such as:
- Federal Perkins loans
- Stafford loans
- Federal direct student loans
Private loans are mainly of two types, such as:
- School-channel loan
- Direct-to-consumer private loan
• Federal loans have fixed interest rates, but private loans’ interest rates differ depending upon the credit rating of the borrower.
• When you default returning federal loans and have more than one loan, you can go for consolidation, whereas private loans consolidation is quite different from this.
• Federal loans are primarily given as prior education support, but private loans can be borrowed to support federal loans, scholarships and other such aids.
Both of the federal and private student loans have different features for helping out the students in their completion of higher education. So, all you need to do is stick to the one, which suits you the best.