Is Interest Charged On Student Loans?

As there are different types of Student Loans, so the interest rates vary with the types of student loans:

Federal Student Aid Programs:

• For Stafford Loans: Average interest rate for Stafford student loans is 6.5%. And this rate was fixed to 6.8% for the disbursed loans after July 1, 2006. The change from variable to fixed interest rate will not affect if the student has borrowed loan before July 1, 2006. The interest rate for these loans in 2007-2008 is 7.22%.

• For PLUS Student Loans: Similar to the Stafford loans, the interest rate for PLUS student loans is also fixed for disbursement of loans after July 1, 2006 i.e. 7.90 percent for Direct PLUS Loans and 8.50 percent for FFEL PLUS Loans. For PLUS loans disbursed between July 1, 1998 and June 30, 2006, the interest rate was variable, and was specified on every year's July 1. For year 2007-2008, the variable rate for these PLUS Loans in both Direct and FFEL programs is 8.02 percent. Interest is charged on a PLUS Loan from the date of the first disbursement until the loan is paid in full.

• PLUS Loans for Graduate and Professional Degree Students: PLUS loans can also be availed by graduate and professional degree students. A fixed interest rate of 8.5 percent is charged in FFEL program and 7.9 percent in the Direct Loan program.

• Federal Perkins Loans: A low interest rate of about 5 percent loan for both undergraduate and graduate students with exceptional financial need is offered by Federal Perkins Loans.

Private Student Loans:

The fees charged by some lenders can significantly increase the cost of the loan. A loan with a relatively low interest rate but high fees can ultimately cost more than a loan with a somewhat higher interest rate and no fees i.e. 3% in fees is about the same as a 1% higher interest rate.

Graduate Student Loans

Graduate loans are popular, as students view them as an effective alternative to deal with student debt. An advantage of graduate student loans is that they are usually obtainable without a need to show stable income or offer security. This is extremely helpful, as most students do not have either of these. Graduate students loans also come at comparatively good interest rates, mainly taking into account the fact that they are totally unsecured loans. The aspect to be cautious about while opting for graduate student loans is that these loans may lock borrowers into a long-term bond with the lender that may not be the most advantageous one. In most cases, applying for graduate student loan is fast and easy and hence, it saves considerable amount of time.

Graduate loans prove to be far more expensive in comparison to student loans. These loans are usually provided on graduation, when student loans are no longer accessible. These loans help to cover the expenses of transition from student life to working life. These costs may include buying a new place to live, work clothes and other unexpected expenses.

Graduate loans can also be utilized to pay off student overdrafts, which are provided to all students as regular features of their bank accounts. The factor to be considered here is that while graduate student loans are fairly economical in comparison personal loans, they are far more expensive compared to student loans.

Individuals, who have a job lined up, may be able to borrow funds from their new manager at a far better rate. These types of loans are an alternative to graduate student loans. Another option to graduate student loans is career development loan, which is available to those studying for certain specialized qualifications such as medicine or law.

Trends illustrate that while student debt continues to increase, graduates are faring better, depending less on loans and more on salaries, to meet their needs and requirements.

By Eddie Tobey

Student Cash Loans - Cash for Higher Education

You might be thinking of studying aboard or in reputed institutions. But what becomes the matter of concern is the lack of fund. Thus, keeping in view, lending institutions have made policies to support students with required cash through student cash loans.

Student cash loans finance the expense that comes in the way of a student’s education. Buying books, admission fees, lodging, are some likely expenses that a student faces in his educational life. All such educational related expenditure can be met with the help of cash loans for student.

Student cash loans are actually of two types: government and private student loans. In government loans, all the expenses are made by government. This type of loans can be refinanced with lower rate of interest. Such loans are usually based on the financial needs of the student applicant.

Meanwhile, private student loans are provided by private benefactors. Student cash loans carry a number of advantages, and the foremost is that students can borrow cash they are seeking and repay it once after graduation and started to earn a specific income. Moreover, student cash loans have special interest rates that are calculated specifically for students. With the existing competition among lenders applicants can take the advantage and spot a marginal rate of interest according to their repaying ability.

Student cash loans are approved in spite of bad credit status. To approve student cash loans in instant, online application process is available. The privilege of online application process is that applicant can collect various quotes and approve loans just sitting from home or office by providing appropriate credit details.

Student cash loans help the students to reach the career edge. Student becomes worry free from financial view and can concentrate on his studies.

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By Julia Russell

Direct Student Loans - Lower Interest Rate, Easier Repayment

Education in colleges can be very expensive and may force students to drop the idea of further pursuing their degree. But there is always the option of direct student loans for students to pay the high college education fees. So the student has not to worry at all. The interest rate of such loans is also low. Hence, students can easily pay their education fees without any tension and can get finish their education thereby joining their hands in the development of the nation.

Direct student loans are offered by the US Department of Education. They do not involve private lenders and hence, the student is taking a loan from the federal government directly. Direct student loans are available in two options: subsidized and unsubsidized, so that all students can avail this loan as per their requirement necessity and need. In case of subsidized rate plan till the college education of a student is over, he won't be charged the subsidized rate of interest. Meanwhile, for an unsubsidized direct student loan, the interest rate is charged from the time of approval till the complete repayment. But the rate of interest of such loans is quite low as compared to subsidized direct student loans.

For repayment of direct student loans, the student has enough time, ranging from 10 to 25 years. If the student cannot manage to pay the loan amount on time, there are a lot of ways under direct student loans for deferring the payment, though the student may have to pay some penalties. The repayment duration of a direct student loan can also be extended.

A free form of Federal Student Aid, filled up, makes you a direct student loan candidate automatically. All you have to do is accept the fact that you're ready to take the loan and the loan amount will be deposited into your account immediately.

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By Steve C Clark

Easy To Get Student Loans

College students today are lucky. When scholarships savings aren't enough students today can get various types of student loans.

As students proceed through college student loans do not have to be paid until the student graduates from college or quits.

Using a private loan can be extremely expensive to pay back at a high interest rate. To ease the burden on students upon graduation Federal student loans are available.

Private Student Loans vs. Federal Student Loans

The best thing to do is get a Federal student loan. Federal loans have lower interest rates and are readily available to students. Private loans are more expensive to pay back and are not recommended if they can be avoided.

The reason Federal student loans are so available is because graduates of college will usually make a lot more money than other people.

This gives the lenders confidence that their money will be repaid. The top education student loans are available through Sallie Mae.

Sallie Mae Student Loan

Sallie Mae is a financial institution than handles Federal student loans. Student loans given are from the government or Federal sources have more favorable terms than private loans.

Sallie Mae offers a combination of student loan options that can meet the type of financing needs of a student all in one place.

For example, the Federal Stafford loans are the most common. They have a fixed rate and low interest. These student loans are very available to undergraduate students.

To receive this loan the student must be attending an accredited school at least half time. The Stafford loan is the most common student loan used today

Generally speaking, student loans are easy for students to receive. Because of their fixed rates and low interest, the Federal Stafford Loan is the recommended one first.

A student loan can make the difference for students to graduate from college so more students are able to complete college today than anytime in the past