Student Loans
Student Loans are the most commonly used tools to fund college. More than half of high school graduates end up with a student loan with the average loan totaling more than $10,000.
Benefits Of A Student Loan
Some of the benefits to taking out a student loan include:
- Getting access to college without having the “money now”
- Deferred payments
- Paying for living expenses
- Utilizing the money for other things
Not everyone has the luxury of having parents who could afford to start and maintain a college fund. A student loan is the perfect way to get access to college and pay for it later.
Drawbacks Of A Student Loan
The excitement of having a student loan will start to wear off once the payments “kick-in”. The size of the payments will range depending on the credit of the borrower.
A person with average credit to above average credit can expect to pay about 8-9% monthly of the total amount borrowed. So on a $20,000 loan (which is not uncommon), the payments will be somewhere around $170.00 per month.
Who Can Get A Student Loan
In 2006 thru the beginning of 2007, student loans were not that difficult to get. Any person with a credit score of 620 or better could expect to get approved.
In 2009 the credit crunch has made it much more difficult. The loans are still available, and the required credit score is a little higher.
Anyone can apply for a student loan, and should do so if they are looking for money for school.
Credit problems may slow a person down from acquiring a student loan, and if that happens a solution is to find a credit-worthy cosigner to cosign on the loan.
Types Of Student Loans
There are two basic categories of student loans:
- Federal student loans
- Private student loans
Each type of student loan provides a solution for a different situation. As a borrower, there are many options available to you and many options for using them to your advantage.
Whatever your unique needs are there is a program that was designed just for you. Read on to discover how to get the right one for your unique situation and how to get the most out of a student loan in the process.
