Federal Student Loan vs. Private Student Loan
- What's the difference between federal
student loan and private student loan? - Which one is best for me?
By Vanessa McHooley
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Federal PLUS Loan
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The Federal PLUS Loan (Parent Loan for Undergraduate Students) is a low-interest education loan for parents. Each year, parents can borrow up to the cost of attendance, minus other financial aid received (scholarships, grants, student loans, etc.).
The PLUS loan is not based on financial need. Qualified applicants must pass a credit check.
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Private loans
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Private loans are designed to supplement federal loan programs and are available from schools, banks, and education loan organizations. They are usually used to cover education costs that cannot be met by federal aid.
Terms for these loans vary according to the lender and your credit history. Keep these things in mind as you consider taking out a private loan:
- Private loans have credit requirements, and you may need a co-signer
- The lender determines the interest rates and fees, which may be affected by your credit score
- Private loans may not offer deferment options
- Private loan programs may offer borrower benefits, such as interest rate discounts or rebates
- No matter what type of loan you take out, be conservative and borrow wisely! All loans have to be repaid, whether federal or private.
This article is distributed by http://www.NextStudent.com
About the Author:
My goal is to help every student succeed - education is one of the most
important things a person can have, so I have made it my personal
mission to help every student pay for their education. Aside from that,
I am just a pretty average girl from SD. <
