Student education loans allow you to meet the higher educational cost by borrowing the money from your federal government or private lender. When you take up the student loan through federal government you don’t need to have any credit history. These loans are offered to you without any credit history. Generally federal government offers several different types of loans to the students. All you need to do is visiting the federal government loan programs at fafsa.ed.gov and apply for them in online mode or offline mode.
In FAFSA form you need to provide your personal and financial information in the required fields. Federal government will determine whether you are qualify for the subsidized loan or unsubsidized loan based on your need for the required money and your ability to pay off for the schooling. Apart from federal student loan programs you can get the student loan programs from private lenders. Students who have utilized the student loan programs can also receive the tax benefits which permit them to cut off either a portion or entire taxes when repaying the loan.
Subsidized Stafford Loans
These loans are offered to the students depends on the Student loan information provided with the FAFSA form. When you obtain the loan the federal government will take care of the interest rates on behalf of you as long as you are in your school or college. Maximum loan amount which you can take out from the Stafford Loans are limited in sized and it is subject to get adjusted as per the inflation rate. At present first year students are given $3,500, in second year they can get $4,500. When it comes for 3rd year they can get 5,500 / year. At present the subsidized loan interest loan rate is 3.40%
Unsubsidized Stafford Loans
These loans are also supported by the federal government. But in this case your interest rates will not be paid by the federal government. When you are in school you can make either the interest only payments or you can you just can let the interest to accrue with your principle amount. Limits on the unsubsidized loan are based on whether you are an independent or dependent on your parent’s tax returns.
For dependents the first year, second year, third year loan amounts are $5,500, $6,500, $7,500/ year respectively.
If you are an independent you can take $9,500 in the first year, $10,500 in second year, $12,500 in the third year.
Unsubsidized loan interest rates in the period 2012 – 2013 is 6.80%.
Perkins Loans
These loans are one other type of student loan which is also supported by the federal government but the difference between the Stafford loans and Perkins loan are who can determine on which student loan application can be selected for the student loan program. Every year all the participated universities & schools will be provided with the particular amount of money that they can use it for providing the Perkins Loans. After that it will the college or university will have the authorization in determining which student can receive the Perkins Loans.
For students who are in their under graduation program at the maximum of $5,500 will be provided per year. Students who are doing their masters can receive up to $8,000/ year via this Perkins loan program.
Just as in the subsidized Stafford loan program federal government will pay off the interest rate as long as the student studies in the school.
Private Loans
Private loans should be kept as last option when it comes for student loan information. In order to get the private student loans you will be required to have a good credit score or you should produce a co-signer who should provide the guarantee for your private student loan.