Different Types Of Federal Loans

There are many different types of loans but one of the most secure loans to get when looking for financial aid are Federal Loans. These loans are available in the United States under Title IV of the Higher Education Act. These are student loans that come directly from the College through funds that are allotted by the Federal Government. Mostly all students that apply for these loans are eligible, meaning that there is no credit checks dependant on getting these loans. There are a few of these Federal Loans available in all Colleges. The two most popular types of loans are the Federal Perkins Loan and the Stafford Loan.

The Federal Perkins Loans are loans that are offered to students who are in need of assistance in paying for their education. These types of loans have a lower interest payment than others and they are provided by the Federal Government. The Perkins Loans have a fixed interest rate of about 5%; you always want to have a fixed interest rate as opposed to a variable rate. The fixed rate will never change and you can have a better handle on paying back the loan.

At the end of your education, the Perkins Loans allow a 9month grace period of sorts. This allows 9 months after graduation of not paying any payments on the loans. What some don’t know is that you do not start to gather interest on the loan until you start to make payments. This is beneficial as well, since the faster you pay back the loan the less interest you will have to pay. Another benefit of the Perkins Loan is that students may be eligible for what is called Federal Loan Cancellation. These are for teachers in low income paying schools and for teachers who teach in subjects where there are not enough teachers such as Math and Science.

The Stafford Loan is a student loan that is offered to eligible students enrolled in American Colleges or University. These loans are guaranteed by the United States Government. These are low interest rate loans but students must fill out what is called a FAFSA, which is a Free Application for Federal Student Aid. This form can be completed by both students that are already attending College or who are waiting to enter College.

Stafford Loans are available from the United States Department of Education from the Federal Direct Student Loan Program. You are not required to make any loan payments while you are in school and there is a 6month grace period for repayment after graduation. The best way to find out, which Federal Student Loan is best for you.

Contact the United States Department of Education for more information. You can find about how to apply for these loans as well as get more detailed information on how much you can get and the specifics of these loans. Finding the right loan is the first step in securing your College financial education.