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Everything you need to know about student loans 

Everything you need to know about student loans 

Earning a college degree does not cost just time, energy, and your social life, but money too! More often than not, it costs more than one can afford immediately. That is where student loans come in handy, especially when the course you are interested in is expensive. It can also help when you would like to be financially independent and not borrow money from your parents. But, like any other loan, borrowing money is a tedious process and can be tricky to understand. Here is a guide to what student loans are, their types, how they work, and where you can get them.

What is a student loan?
Money borrowed from a government or private lender that you use to pay for college is called a student loan. Like all loans, the amount must be paid back, along with an interest that multiplies over time. While the amount must primarily be used to pay the tuition, hostel expenses, buy educational books, and fees associated with the college, students can sometimes use the money for other things. A clarification to note is that student loans are not grants or scholarships. While the latter two are given based on your grades, and you do not have to pay them back; any student can take a loan, but it is repayable. Other ways to earn money include work-study programs, where students get paid to work on-campus. But of all the options, student loans are the most popular.

Types of student loans
As mentioned before, the government or private banks/lenders offer student loans. Thus, student loans are of three types: federal, private, and refinance, where you get back part of the money after you finish studying. Federal loans offered by the Government are more flexible, while private loans by banks or credit unions are typically more strict. Which type of student loan you choose depends on the amount you need, the year of school you are in, and your credit rating.

How do student loans work?
Whether federal or private, obtaining a student loan starts with the filling-up of an application form. This application is usually sent to your school. The financial aid office in your school looks into how much aid you, as a student, qualify for and sends a letter back to the lender. You must sign a promissory note because taking a loan entails a legal statement, where you, the student, agree to the lender’s stipulations, including the amount of the loan, the interest rate, and other terms and conditions.

Where can you get student loans?
Taking student loans can be stressful, and it is better to avoid them by aiming for grants and scholarships. However, since not everyone is qualified for that, it is imperative to look for a university that fits your budget. If that is not possible, search for part-time work to repay the loans as soon as possible. But if, after all this, you are still sure you need a student loan, here are some trustworthy and reasonable places to get them.

  • Credible
    Credible is a simple platform to find out where you can get student loans. It shows you multiple lenders with an array of payment options. The application process is quick and fully online, and the best part is that the platform does not take any fees from you. Signing up to Credible is a significant first step for those looking for a one-stop solution to financing their education.
  • College Ave
    College Ave is the right one for you if you are looking for a lender with the lowest interest rates. You can choose between variable and fixed interest rates. For undergraduates, the numbers are as low as 0.99% for variable interest and 2.99% for fixed rates. If you want to pay your debt faster, opt for the variable-rate loan. While it fluctuates, it is often lower than the fixed interest option, which offers stability for those looking for more extended payment periods.