Some Factors to Think About For most students, it is impossible to escape the need to secure funding to enter and complete a university education. With most students having no income and no credit history, they have to seek student loans with bad credit scores, thereby making the challenge of getting good loan terms more difficult. Students are given a bad credit rating only because there is no evidence yet to prove a good attitude towards managing finances and making loan repayments. However, the good news is that financial aid packages, especially those loans available from the US Department of Education, are available at low interest rates. Of course, there are options available when it comes to student loans, as well as factors to consider and look out for. Here is a brief rundown of some of the things applicants should be aware of. Advantages of Federal Loans There is no doubt that federal sponsored or provided financial aid is the most popular form of funding for students. This is partly because of the ease with which students can qualify, and because when seeking student loans with bad credit, they are perfectly designed for the job. But there are some excellent advantages to get from them too. The challenge of finding loans that have low interest rates can be very difficult when turning to private lenders. But because these loans are provided through the US Department of Education, the terms are tailored to suit the particular pressures that students face. The rates, therefore, are lower than with private loans, and the repayment schedule is very flexible. The two common federal student loan programs are the Stafford and Perkins programs. They both boast low interest and flexible repayments, but the chief difference is that Stafford loans are designed for those coming straight from high school, while Perkins loans are to help students in serious financial difficulties. Alternative Loan Options It is worth noting that just because the parents of students have excellent credit histories does not mean funding is not available. In fact, getting approval on student loans with bad credit are very much possible even if the parents have a much higher credit reputation. However, the borrower in this case are the parents, not the student. Known as a PLUS loan, the loan is granted through the US Department of Education student financing programs, like the Stafford and the Perkins programs, directly to the parents. This is because these programs assume that parents will provide some financial aid their children anyway. So there programs with low interest rates only cover a share of the funding, usually 50%. But PLUS loans are intended to cover the amount the parent is expected to pay when contributing to college costs, lifting the extra pressure that the family might find themselves under. So, it is not technically a student loan, but a parent loan. Qualifying for Loans Most students take out a mix of private and federal loans, though this can cause havoc when seeking student loans with bad credit. However, it is generally difficult not to get approval if all of the necessary boxes are ticked. Qualifying rests on a number of criteria, with the ability of pay the key factor. If the family of a student is financially assured, then funding may not be forthcoming. But the Stafford loan is available if at least half of the cost can be covered by parents. Low interest rates might not be enough to keep a student above water financially, which is when the Perkins loan is needed. Proving financial difficulty is necessary to secure this loan, but this can also be easily done when visiting the financial aid office on campus, and seeking student loan options.
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