Author: Phillip Bright
The majority of American students depend on student loans to achieve their educational goals. These loans play a significant role in reducing the burden of paying tuition fees.
Typically, there are two primary categories of student loans:
(a) Federal Student Loans
(b) Private Student Loans
Federal Loans are provided by the U.S Department of Education, while private loans are provided by private institutions.
These two categories of loans have different eligibility criteria, interest rates, forgiveness policies, and loan modification alternatives.
Depending on your financial condition and the kind of degree you are seeking, the loan option could vary.
Federal student loans are often the best option for students, but if you maximize your loan amount, private student loans may be able to augment your financial need.
However, finding a suitable loan option may be tough. To save you the stress, here is a guide to locating the top lenders to support your pursuit of higher education.
Our Best Pick for the Best Student Loan
1. Federal Student Loans
The United States guarantees federal student loans. Private student loans doesn’t give access to the Department of Education advantages and repayment alternatives. Parents and students looking for financial assistance to pay for their children’s education can choose from one of four primary types of federal student loan programs.
2. Direct Subsidized Loans
The U.S. Department of Education supports undergrads who need money. Students who enrolled at least half-time often get support throughout the grace period after leaving school, and during the deferment term.
3. Direct Unsubsidized Loan
This is the type of federal loan given for undergraduate, graduate, and professional programs. However, this often comes with interest.
4. Direct PLUS loans
The direct loan plus is given to parents, graduates, and professional students. Credit checks are necessary for this loan, and applicants with a poor credit history must satisfy additional conditions.
5. Private Student Loans
As opposed to federal student loans, private student loans vary more. The borrower and your credit will determine your rate, period, fees, loan amount, and repayment plans. To avoid making a costly mistake, it is crucial to evaluate lenders and offers before applying for a private student loan. Furthermore, many students require a creditworthy co-signer to be eligible for loans. That is because the loan offer is based on credit worthiness.
Let’s take a look at some of the best private student loans.
Private loans from College Ave Student Loans are available for domestic and international students and parents. Borrowers must be registered at an institution that qualifies and makes adequate academic progress to be eligible, whether they are enrolled full-time or part-time.
Due to its extensive selection of loan and repayment alternatives, low costs, and lack of prepayment penalties, College Ave ranks as the best overall. This lender also takes into account forbearance arrangements for customers who are struggling financially.
- 5 to 15-year repayment periods.
- Interest rates for college students begin at 1.79%.
- $150 Incentive for students who complete their degrees with career loans.
- Late payment cost of $25
- To be eligible for the co-signer release, you must pay more than half of the amount due on time.
Sallie Mae Loans
This loan is awarded to students that are pursuing undergraduate, graduate, or career training degrees at institutions that do not award degrees. Graduate students are also given 100% coverage for costs that are officially authorized by their schools.
With Sallie Mae, graduate borrowers have the option to make interest-only payments for a year following graduation. Moreover, they can postpone payments for up to 48 months if they are enrolled in a fellowship, internship, clerkship, or residency program.
- Available to students enrolled for less than half the time.
- 100% US-based customer support
- No details about the necessary credit scores are available.
- Fees for late payments
- No pre-approval
Grants and scholarships are the best ways to pay for college. However, many students will also require financial assistance. Federal student loans are typically the best option. They can be accepted regardless of your income or credit history and have a fixed interest rate for all borrowers.
Federal student loans are also eligible for loan forgiveness programs, including repayment plans and assistance schemes. Repaying government loans may be simpler than private loans because of its benefits and repayment options.
Unlike private student loans, which are based on the cost of attendance, federal student loans include original fees and maximum loan limitations. These are determined by your year of study, with exception of Plus loans.
Credit-worthy students may be eligible for private student loans with reduced interest rates and no origination fees, making this alternative less expensive. If you’ve borrowed the maximum amount allowed by federal law and still need money to finish your education, a private loan might be your best shot.