If you are considering going to college, there is a possibility that you might need some financial assistance. Although scholarships and grants come in handy, they might not be adequate to cover all your college education expenses. Therefore a student loan might be your option to bridge the deficit in the costs of a college education.

Sources of undergraduate loans

You can get a student loan from either federal government offers which offer low-cost student loans or through private lenders which are the most common providers of private student loans in the US. Federal government student loans are affordable and offer competitive rates, and students falling within the set minimum requirements can easily access them.

Based on one’s credit history, private loans are offered, and the lender will determine one’s eligibility. The loans are expensive compared to federal government loans, and their terms are strict.

Also, there are Peer to Peer loans whereby one can lend another individual money under an agreed-upon contract.

Types of government student loans

Federal subsidized loan: This loan is offered to students based on financial need, and the federal government pays interest on the loan as much as they are in school and up to six months after graduation.

Federal Unsubsidized loan: This form of loan is available to all graduate and undergraduate students, and they have to pay all the interest, which is reviewed annually.

Perkins Loan: This loan is available to students who show extreme financial need. Although the federal government guarantees these loans, the college where the student is attending is the actual lender.

Federal Direct Consolidation Loans: These loans can be accessed to students that have received at least one federal student loan. It allows the student to consolidate all their outstanding federal loans into a single package that is manageable.

Private Loans

When the federal government loans fail to meet your education costs, you can seek a private loan. However, private loans will depend on one’s credit history, and those that have not established any history can pose a challenge.