Private Vs Federal Student Loans

Getting through college without a job and very little money can be stressful. I know I've been there. In the end I was forced to take a job at the local pizza place just to make ends meet. Studying all day then working late into the night is definitely not fun. I studied business and dreamed of financial freedom. Making plans for the future seemed to get me through those dreary days that seemed like they wouldn't end. For many finding a part time job while they study just isn't possible, that's why finding a good student loan to ease the financial burden is critical.

There are many kinds of student loans with varying rates of interest, conditions and repayment schedules we'll have a look at a few of these below.

There are two major sources for student loans, the Federal Government and private lending institutions. A Federal loan is the cheapest way to fund your college degree but these loans generally only provide enough to pay for your basic college expenses. There are a few different types of Government loans and the school where you are attending should be able to help you find a loan that suits you. Some loans will require interest payments to be made immediately while others are interest free until you complete your college degree.

Make sure you are aware of all of these details before signing up for a loan. You need to be confident that you can make the repayments if and when they are due. While Government loans generally make things easier for students they only provide for the bare necessities; that's why many students turn to private lending institutions for addition funds. This is where things get a little bit complicated and some students find themselves in difficult situations with loans they just can't repay.

Private institutions, such as banks and other lending companies do not give charity, they are out for a profit. This means before giving a loan they will check your credit score and most likely will require a co-signer to verify that the loan will be repaid. Interest rates will vary depending on your credit score and the credit rating of your co-signer. If you have no-one to act as a co-signer it may be very difficult to get a loan. If you do bear in mind that the interest rates will be much higher to take into account the perceived additional risk.

Before applying for a student loan make sure you look at reviews from other students to see if they have any bad dealings with the company. You can also look up the company at the Better Business Bureau to see if they have any information. Lastly, don't forget to consult with your school as they should have a wealth of information about finding the best student loans for your situation.