There is a Student Loan That Will Work for You

Posted by: guestblogger at January 24th, 2012

Student loans are intended to help a student pay for college tuition and other related expenses, of course.  But many, if not most, people, think that student loans are all the same: a student borrows enough for each semester until their degree is earned, or they quit, whichever comes first.  (It is important for all students to understand that whether or not the student remains in school and completes a degree, the student loan funds will be payable. The lending institution has paid the college for the tuition and the debt was incurred.)  But there are many varieties of student loans, and it is important to find the exact type that works for each student.

Basic Student Loan

This is usually the lowest cost solution for financing a college education.  They are usually available in both fixed and variable rate options.  The funds made available to the student are solely for the cost of education, and will cover the entire tuition, if that is required.  Any other funds the student receives toward the tuition, such as financial aid or scholarships, will lower the amount available under the loan.

Extended Student Loan

These loans are intended to help students who need additional funding to cover other education expenses that are not met by your basic student loans.  These funds are intended to cover items that are outside the school tuition, but are necessary for the student to be able to attend school, such as transportation and lodging expenses.  Normally, these loans are at a higher rate than the basic loan, and the amount available is also higher.  Since this is a more expensive option, students should make sure that there are no other options available.

Community College Loans

Many students and parents are under the mistaken assumption that student loans are only available for full time university students.  Many financial institutions recognize that Associate Degrees are extremely valuable in today’s employment market, and also that Community College often is a springboard for a four year degree.  These loans are usually at a higher rate of interest, and have lower maximum ceilings than basic or extended student loans.

Student Loans for parents

Often, a parent or parents may not have the funds to pay for their child’s education, but they prefer their child not to be burdened with the repayment of a large loan before he even starts his adult life.  In this case, the loan can be obtained by the parent, and becomes an obligation of the parent, who may, over time, have the resources to repay the loan, even if he does not have it at the outset.  These loans are usually at better rates, and can be obtained for higher amounts, since the parent will normally be considered a better risk.

When you talk to your financial advisor at school, make sure you give them all of the details about your circumstances, and make sure you discuss all of the loan options that you may have available.

In addition to the loans listed above, you can also apply for scholarships. Before giving out your info to a private business or person for a loan or scholarship, do a free people search. Make sure your personal information is not shared with an unreliable source.