There are a number of different types of student loans. They are all created to help students and parents discover the right choice for their respective situation. The overall cost of both private and public colleges are steadily increasing and students need to find the means for funding their education. Deciding which student loan, whether a private or federal student loan, is a very important decision. You will eventually be responsible for paying it back, so research all of your options. &nbsp

What is a Student Loan?

If you are a student who is preparing to borrow money as part of a student loan, prepare to learn all that you can about what a student loan is and why you need it. It is meant to help you as you pursue your collegiate education. Because the cost of education is continually rising, student loans give you more opportunity to go to the school of your choice. Be prepared to begin repaying of the loan a short time after you have finished your education. &nbsp

Types of Student Loans

There are three primary types of student loans available, a federal student loan, a private student loan or a parent loan. Two of the most common federal loans used by students are Stafford loans and Perkins loans. What is beneficial behind a federal student loan is that federal laws regulate the interest rates charged for these programs. A lender has to offer a federal loan at the specified interest rate, which is usually lower than the national interest rate. A federal student loan can also be consolidated after the student graduates, allowing the student loan repayment plan to fall under one large umbrella.

Private student loans are different from federal loans, and students applying for these don’t have to fill out federal forms. Private lenders offer these loans, making them cost more because there is no legal requirement to stay within a certain interest rate. Private loans also require a student to submit their credit history, and the interest and fees paid on the student loans are based upon the student’s credit score. Parents may be required to co-sign for a private student loan, making them responsible if the student has to defer payments at any time.

A parent loan, or the Parent Loan for Undergraduate Students (PLUS), is a type of student loan parents apply for to encompass any additional cost their child’s financial aid or student loans won’t cover. PLUS loans, like other federal loans, come with a fixed interest rate. These loans can also be consolidated, like the Stafford and Perkins loans, and parents are fully responsible for repaying PLUS loans to the lender after they are distributed.

Finding student loans that are right for you doesn’t have to be a difficult task. It just takes a little time and research before making a final decision. Talking with your college’s financial advisor can help you go down the right path when choosing a loan. It is important to go over all the student loan repayment options when choosing a loan program from a lender because you will be financially responsible after graduation. Deciding upon the right loan can help you achieve your dreams of higher education.

By: Samantha Ellis

The source of funds for a college loan does not alter the expectations of the student who is awarded that loan. Every lender of a college student loan has certain obligations.

Every lender of such a loan needs to supply the borrower with certain information. For example, anyone who receives one of the college based student loans should receive a detailed repayment schedule.

Yet a borrower looks for more than just a repayment schedule. A borrower needs to know the loan rates and the loan fees.

A person who is awarded one of these student loans should also be provided with information about the balance owing on the loan and the payment options. Once the borrower has paid the loan in full, then he or she should get written confirmation of that fact.

Rights of Students Awarded One of the College Student Loans

A student who struggles to make payments on a student loan has a right to defer payments for a defined period.

A student who feels unable to fully repay a loan might qualify for forbearance on that loan. College student loans give qualified students the right to request such forbearance.

A student provided with money through a college student loan should look into the possibility of getting a graduated payment schedule. An income-based payment schedule might also be an option.

Some private lenders of college student loans (and all sources of government loans) allow for early repayment of that loan, without charging a prepayment penalty.

Obligations of Students Receiving One of the College Student Loans

While any student can request deferment on a loan, or forbearance on a loan, the student making that request cannot assume that it is granted.

The student must continue making payments on his or her college loan. Moreover, the student must keep the lender informed of any changes to his or her vital information.

Suppose, for example, that someone getting one of the student loans available from colleges, changes his or her address. The lender must then be provided with the new address. Suppose a student awarded a college loan changes his or her job.

A name change for a loan recipient should not be hidden from the eyes of a loan lender. By the same token, a student awarded one of the college student loans needs to keep the lender apprised of any change in his or her phone number or Social Security number.

A student can maintain a respectable credit score if he or she fulfills all the above-mentioned obligations. Such a student has clearly shown a willingness to act “in good faith” towards the lender of the loan money.

By: Martin Haworth

To most people the only source of loans are banks and credit unions. However the finance world has many more players than that. Real estate investors have long used private mortgage investors as a way of buying real estate. Small businesses are now learning they can also use private investors to secure the funds they need to expand their businesses.

Private investors are individuals who are willing to lend their money to other people. In return the private lender receives a higher interest rate than they would get if they just put their money in the bank. Every private lender has their own lending criteria, which is often less strenuous than the red tape of a bank. I don’t meant to imply that getting a private loan is easy or guaranteed, rather just that the terms and conditions of a private loan are far more flexible because you only have to convince one person of the merits of your business proposition.

Make sure the business deal is a good one. Don’t waste your time or theirs by approaching them without a business plan or having done your due diligence. You often only have one shot to impress a private investor so don’t go into the meeting unprepared. Be confident but take any critique they offer to heart. They may help you by giving you solid insight into why you should not go forward with the plan you presented them or at least show you where your plan is weak. Listen carefully and take notes on what is said if the person declines to invest. You can tweak your business plan for the next potential investor. Or maybe the investor will say that you should fix the plan and come see them again.

Most private investors are savvy business people themselves and will understand a good business transaction when they see it. They will also be able to see through any scam someone may try to pull. Private lenders are not going to invest in a bad deal. If your business idea has merit then chances are the private lender will discuss terms with you. You are not obligated to take the terms of their loan anymore than the lender is obligated to fund the loan. Negotiate the terms to see if you can get a lower interest rate if you think it is too high. Don’t be afraid to ask for a lower interest rate or a longer period to repay.

By: Rhonda Holland