Planning College | Types Of Financial Aid Available

Want To Get A Federal Student Loan? Here Are The Different Types

The university and college student each year have to pay thousands of dollars to complete their degree program. Some students head toward the financial aid to lessen the burden and think of getting a loan. But which type of loan will benefit you the most in pursuing your studies and not stressing you out about the repayment of the loan.

Before applying for any student loan, you must know the basics behind each type of loan. Without knowing the differences among different student loan types, you can choose to get the loan which rather than giving you financial peace can stress you out. Therefore, we are going to tell you the different student loan types which you encounter while applying.

Federal Loans

It is free financial aid from the government which is given to the students who fill out the free application form for federal student aid each year. Then after reviewing your application, you are assessed based on your income and expenses and the college costs annually. Different types of federal loans are available to lend to the college students. But each of them has affixed maximum amount which you can borrow. A good thing about federal loans is that these can be easily paid off using student loan consolidation. Different types of federal loans are:

Direct Subsidized Loans

These federal loans are for the college students who are in financial need. They offer lower interest rates, and the interest rate is not changed throughout the life of the loan. It can help you to save money by paying lower interest rates. But as you have to apply each year for the loan the interest rate may vary from our previously approved federal loan interest rate. The benefit of subsidized loans is that the government have to pay off the interest that accumulates during the time you are studying in school or college.

Direct Unsubsidized Loan

These are approved for the students who are not in a financial need but don’t have enough money to pay the college fee. These also have lower interest rates. The difference from the subsidized loans is that all the interest accruing throughout the repayment has to be paid by you (borrower) which ultimately increases the overall loan repayment amount.

Direct Plus Loans

If the student has taken student loans but still are not enough to cover the whole educational costs then, the direct PLUS loan can be applied by your parents to fulfill your educational costs. The con of these PLUS loans is that they have fixed interest rate but much higher than the subsidized and unsubsidized loans.

Federal Perkins Loans

This type of federal loan is the best choice for the students with financial needs. These have a fixed interest rate of 5% which is higher than subsidized and unsubsidized. You can borrow up to $5000 per year which is much higher than the other three types. But the drawback is only a few colleges participate in this type of loan.

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When Should I Use A Debit Or a Credit Card?

January 1, 2018

5 Healthy Habits for a Positive Credit Score

5 Healthy Habits for a Positive Credit Score

Maintaining a health score is way easier than improving a bad one. This is why you need to give up your bad spending habits and change your lifestyle. You need to give up on your shopping frenzy, and crazy purchases.

Following,we are naming a few healthy habits you should adopt to keep a healthy credit score.

Keep Track of Balance

It’s important to know how much revolving credit you have as compared to the one you use. To elevate your credit score, you need to keep paying back your balance and maintain a low percentage.

If you have more than one credit card balance, then you better consolidate them all in one personal loan. Merging multiple small loans in one big loan puts you on the right path to recovery as you now have only one debt to focus on.

Even after you have paid the balance in full after a month, your utilization rate will be higher than what you expect. You can avoid this if you check whether your credit card company accepts multiple payments or not.

Get Rid of Credit Card Balance

You need to get rid of small credit card balances to improve your credit score. Check how many credit cards you have, and calculate your total debt in detail with the current amount of each card.

You need more than one credit card but don’t pile them up. Starting paying back the ones with thelowest interest rate, and amount to clear your mind, and try to stop polluting your credit card reports. Some best credit repair companies advise you against credit card debt, and they are right.

Put the Calendar to Good Use

If you are searching for a loan, search for different rates offered in themarket.

When you apply for credit, it leaves a mark on your credit score. However, three loan types including student, mortgage, and auto give you some breathing room. These loans suggest theneed, instead of bad spending habit.

Still, if you fail to keep up with your payments for a while, it will have adverse effects on your credit score. It will take you some time to clean it up.

Pay Bills on Time

If you want to make a major investment, you need to manage the finances. If you are struggling with your bills, you don’t want to make late payments. It will have severe effects on your credit score even if you have some savings.

On time payments is the key to a positive credit score. Yes, you can burrow a loan,and it won’t look bad on your credit sheet. The moment you startmake your payments late, your credit score will drop, and you will have to pay for it in the long run.

Don’t Obsess

A healthy credit score is like healthy living; it’s a lifestyle, not a goal. Yes, you have to change your habits to improve and maintain your positive credit score. This is why you need to work with best credit repair companies as they will help you see your shortfalls, and make necessary changes.

Related:
A Guide to Setting a Budget and Saving for a Rainy Day
5 Tips on Renegotiating The Mortgage On Your Home
Have Bad Credit-Need a Loan-Learn How