The two major types of student loans are federal student loans and private student loans. These two major types of loans are further divided into various options in order to provide students with the best solutions in financing their educational expenses for their college education.
The first type of loan which is the federal loan program is offered by the federal government as the name suggests. There are different types of student loans offered under the federal loan program. These are:
- The Perkins Loan – This type of loan is designed for students who have financial need. This loan has a low interest rate. The downside of this type of loan is there is only a small amount issued and therefore only a few students can get a Perkins Loan.
- The Federal Plus Loan – The big difference of this loan from the other types of student loans is that the loan is awarded to the parents of the students who will be attending college. The credit history of the parents is considered in applying for this loan. This is why there are only limited parents who can obtain the Plus loans.
- The Stafford Loan – This type of student loan is only awarded to students who are in financial need and this financial need is determined only by the federal government. There are three types of Stafford Loans that you can choose from and these are the unsubsidized Stafford Loan, subsidized Stafford Loan and lastly the additional unsubsidized Stafford Loan.
Private student loans can be obtained from private lenders such as banks. Among the two major types of student loans, private loans are the hardest to acquire since the lender has to examine the financial status of the person applying for it. Therefore, individuals who have foreclosures and bankruptcies may not qualify for this type of loan.
There are a lot of types of student loans and the best way to get the best deal is to do some research and be attentive. Try to explore the different choices available for you. Select the best paying back student loans options that can best fit into your present situation as well as your future situation. Loans can take some time; therefore you should take some time in saving as much money as possible.