A good credit history is an essential prerequisite for applying for a student loan. A student with a good credit history always stands in good stead to qualify himself for a student loan. So, it is always advisable that students who go for loans keep their credit within limits.
Many lenders provide loans to students with no credit history. There are two types of student loans namely, federal student loans and private student loans. The former are backed by the US government (coming under the department of education?s federal student aid programs) and are approved based on the financial need of the student, whereas the latter are considered as personal consumer loans. Refinancing of federal student loans is possible at far lower interest rates than private loans. Private student loans are approved after checking the credit history of a student or his parents.
Usually, a student loan with no credit history does not require any income or a co-signer. But this is sanctioned only for a small credit limit. To get larger credit limit, the help of a co-signer is essential. Before taking student loans with no credit history, compare the interest rates and the fees from different lenders. You can get student loans applying online also. The documents needed include proof of your identity, and your place of employment. It is better to look for loans based on your job history. It is advisable to have a thorough check on the terms and conditions of a student loan before signing the deal.
By: Richard Romando
Posts Tagged ‘Federal Student Aid’
College Student Loans – Federal and Private Loans
December 27th, 2009
When a student or parent sets out to obtain a loan and/or financing a college education there are a many different sources they can go to in order to acquire the funding necessary. However, there are two different categories of loans which are either federal loans or private loans.
As for federal funding for college, in many cases it is much easier to get the financing if you fit the criteria set in place. By far, one of the most popular federal student loans is the Stafford loan. There are two types of Stafford loans which are the federal family educational loan and the William D. Ford federal direct loan. The process of obtaining a Stafford loan is through the student filling out a federal student aid application, then once approved they will sign a promissory note on the loan.
The only real difference between the two types of Stafford loans is where the actual funding is coming from. For a direct loan, the funds are coming directly from the federal government as for a FFEL loan, the funding comes from either a bank, credit union or another participating lender in the program.
There are also a couple more that should be mentioned in this article and those are the Parent PLUS and Perkins loans. First, the Parent PLUS loan is designed for parents in need of assistance for paying their child’s college fees. This loan basically will fill in any gaps that the parent needs in order to cover all the college expenses fully.
The Perkins loan is basically a student loan which can be applied for at the college or university financial aid office which usually has a very low interest rat, but has a maximum loan amount of around $4,000 each year for students. They are federal fund and can be added to other types of funding. There are late fees and fees for skipping payments on the Perkins loan as well.
These loans and more can all be inquired upon at your selected college or university.
Credit history may not be as necessary if it is necessary at all in obtaining these types of funding options. As opposed to federal student loan funding, there are many private lenders willing to provide assistance for college funding as well. However, if you so decide to take the private lender route for financing a student loan, it is important to remember that most will need a bit of a credit history from the potential debtor and will most likely require a co-signer on the loan if the student with not much credit history at all is attempting to obtain the financing.
Federal funding for college students who need the financing, as well as parents is very available for anyone who has a need for such funding and it would be a good idea to look at all the options available in order to compare interest rates, fees, and more as these student loans will be around for a while after college as some loans will begin the payment schedule immediately during college like the Parent PLUS. Other repayment schedules will begin after 6 months for Stafford loans and 9 months for Perkins. So it would be a good idea to get all this information first hand before making any quick decisions about your college student loans.
By: S. Michael Windsor
Private Student Loans
December 5th, 2009
Private Student Loans are a great option if you or your parents are unable to receive enough federal student aid. Private college loans should be used only if you are in need of additional money for school. Most times, these loans offer interest rates that are much higher than the federal student loans due to banks wanting to maximize profitability. It’s best to shop around and see what rates all financial institutions are offering, which will allow you to find the best rates possible.
There are many options available when searching for a private school loan. Borrowing from a large bank, small Credit Union, or Peer-to-Peer lending are all options that are available and all can offer very competitive interest rates. It’s important to look at both the interest rates and the terms of the loan. Even though a private school loan may offer lower rates, late fees and other misc. fees can cause your loan to cost more over the long term.
If you’re looking into a private student loan consolidation, make sure you know all details about the consolidation terms. Once you’ve consolidated your private loans, you will be unable to complete another loan consolidation in the future. It’s a great idea to think about consolidating your loans if you have multiple school loans outstanding.
There are many benefits when consolidating your college loans. You can fix your current variable interest rate, which means the interest rate will not change if student loan rates increase. Also, you will only have one monthly payment instead of multiple student loan payments. Having one student loan payment is much easier, since you only have to make one monthly payment instead of multiple payments.
Many parents and students don’t realize that there are many options available when looking for financial aid.
By: Tom A Sullivan