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Federal Loan Student - Federal Loan Options for Students - Get Only What You Need, Which Loan is Best for You

How to Choose the Best Federal Loan for Your College Education

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College educations are costly. Most people cannot pay for a college education on their own. If you are looking for a way to attend college and defer payments, a federal loan for students may be your only alternative. The Federal Government offers several student loan alternatives. Know your choices before you fill out the paperwork for your student loan. Do not grab the first loan your school offers. These loans may not be the best choice for your financial needs.

Get Only What You Need

Your first step in deciding your student loan is to assess the costs of your education. You want to make sure you have enough to make it through your education. Remember you will have to pay these loans back after you complete college. If you take out too much so you can live the high life, the interest will be high when you graduate. You do not want high payments when you are getting your first job. Consider your tuition, books, housing and eating expenses. Remember to keep your debt manageable.

Which Loan is Best for You

Before you can apply for a loan, you need to know which loan you want: Stafford loans, Perkins loans or PLUS loans. Stafford loans will give you two alternatives; private loans or direct federal loans. If you get a private loan, funding comes directly from a private lender. The approval will go through banks or credit unions and the loan will come directly from the private bank. Direct federal loans find funding through the federal government. This loan has lower interest rates. Advisers recommend Perkins loans because you lock in a low interest rate. With this loan, you will get an interest rate of around 5%. You will have 10 years after your graduate to pay back the loan at this low interest rate. With Perkins loans, the financial need of the student is the primary reason. Parent Loans for Undergraduate Students allow parents to borrow money to help defer education costs. PLUS loans have a fixed interest rate of 8.5%.

How to Apply for Federal Loans

Applying for a federal student loan begins with filling out an FAFSA Application. All federal loans find approval through the FAFSA form. You will need your school’s code when filling out the application. Contact your school and get this number before you begin your application. You will also want to contact your school’s financial aid department so they can help you in filling out the paperwork.

You will likely need a student loan before you complete college. Take your time when applying. You want to make sure you get the best loan with the best interest rate. Look closely at all of your choices before you apply for a loan that will hurt you financially after you graduate.

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