Student Loan

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What Types of Student Loan Are There?

The amount of financial aid you can obtain throughout your college course or degree is huge! There are various federal grants, college grants, student loans and scholarships available to provide you with those all important funds to enable you to attend the college you have always wanted to. A student loan is the source of financial aid that is growing in importance, merely because it is the largest contributor to financial aid at present. There are various types of student loans available so let's peek at the most popular types.

Perkins Loan

The Perkins loan is a student loan made available to those students that demonstrate exceptional financial need. The federal government will allocate an amount of money every year for Perkins loans and give this to schools and colleges. The school or college will also contribute financially to the loan. This means that the school or university will become your lender for this money for college and it will have to be repaid to them. If you attend college full time, you will not have to start repaying the loan until nine months after you graduate.

Stafford Loan

The Stafford loan is also awarded to those students that demonstrate financial need. This is a federal loan and is awarded as part of your federal financial aid package you will receive after submitting your Free Application for Federal Student Aid. The student loan comes in two forms, subsidized and unsubsidized and is either lent by the federal government themselves or a private lender.

Federal Consolidation Loan

If you have accumulated several Stafford loans or Perkins loan throughout your college course you could do well to take out a federal consolidation loan. This student loan will pay off all of your existing federal loans and consolidate them into one loan with one monthly repayment. This will help you to ensure that you manage your repayments effectively and make sure you don't miss paying off one of the loans - you will only have one to remember.

Private Loan

If your financial aid package doesn't provide you with the funds that you need then you can turn to a private loan from a financial institution such as a bank. Such lenders may check your credit score as part of the lending application and as students have little or no credit score then this may prove to be difficult. Your college should be able to provide you with a list of recommended lenders. You should steer clear of falling for student loan scams as these can prove to be very costly and land you in thousands of pounds worth of extra debt that you could have avoided.