Monday, March 2, 2009
Considering Student Loan?
Written by: Keun H. Maeng
It is still questionable to correlate a relationship between the roiled credit markets with the countless number of students unable to get loans for their fall semester. Even though the deadline for the tuition payments are currently approaching, the lenders do not disburse the funds until dates pass; such as the last drop date or the last date to switch from full time to part time.
For private lenders, the ones not guaranteed by the federal government, however, have increased their credit standards. As a result, there will be a significant amount of families applying for the PLUS parental loan program. Unlike private lenders, this program is federally guaranteed and lends the loans up to the full cost of attendance. The requirement for the PLUS loan is to not have an adverse credit history. If, however, you are denied for the PLUS loan, you can obtain the Stafford Loan. Many financial aid officers are urging families to take advantage of the federal borrowing options. The loans offered by private companies should be your secondary choice.
Rates and the required credit scores in private loan companies are indefinitely rising. Sallie Mae, one of the largest private student loan companies has disclosed last quarter, filing the rates on private loans as averaged more than 12 percent. On the other hand, the federal loan is currently capped at 8.5 or 7.9 percent. Without a question in doubt, it is quite obvious to figure out what you need to borrow rather than what you want to borrow.