Education loans are a huge help for students who want to enroll in different learning programs. These funds are offered by the federal and state government as well as a number of private lenders. The objective of education loans is to make higher education accessible to students regardless of their financial standing. Since the cost of education has continuously been rising, student education loans have emerged as the need of the day. Most students cannot manage to attend college because of lack of financial resources. This is why various organizations have introduced education loans for students so that they can pursue college programs and establish a promising career. The terms and conditions of education loans are easier than other types of loans. Also, their rate of interest is lesser compared to other options. In the same way, the repayment processes of these funds are easy and manageable.
Types of Education Loans
There are a number of types of education loans. Broadly, they can be divided into 2 distinctive categories:
- Federal Education Loans
- Private Education Loans
Federal education loans
include the Stafford loans, Perkins loans and Plus loans among other options. These loans are granted by the government to the students who demonstrate financial need. The interest rate of federal education loan
is lesser compared to the rate of interest of private education loans
. Students can opt for subsidized or unsubsidized loans.
Private loans are offered by private organizations such as banks. Generally, these loans allow students to get cover for the complete cost of their education. To avail these education loans
, students need to have a good credit score. There are some lenders, few and far between, that may also offer education loan
to students with bad credit. The rate of interest on these education loans for students
is much higher when compared to other kinds of loans. This is why students should opt for these loans if and when they exhaust all other financial aid choices.