The most important types of student loans

Student loans are helpful for completing higher education. Although there mainly are two broad categories of student loans, there are various types available. You can obtain one depending on your affordability, your needs and requirements. Various lenders offer the private student loans. On the other hand, only few lenders have approval of the federal government and can go on to offer the federal student loans.

Four important federal installment loans

The four main types of federal student loans are:

  1. The Perkins loan – The Perkins loans are available for both the undergraduates and the graduates. In case of the loans, these are the most sought after. This is mainly because, the Perkins loans have been designed so for the low income families. The interest rates on these loans are really low but can result in hurting your credit, if you fail to repay the bad credit installment loans. The amount you can obtain through a Perkins loan does not only depend on the financial status of your family, but also on the funding available from your college.
  2. The Stafford loan – Other than the federal government, third party lenders too can offer these loans. These loans can either be subsidized or unsubsidized. In case of the subsidized loans, you are not required to make any interest payments till the date you are in school. It is the government who makes the subsidy payments. These are for the low income families. On the other hand, the unsubsidized loans are for those who can manage to make the interest payments. That is, in case of the unsubsidized loans, you will have to make the interest payments all of you own, even when in school. Another advantage of Stafford loans is that there’s a grace period, during which period the interest doesn’t accrue even if you cannot make payments.
  3. The PLUS loan – PLUS loan also known as the Parent loans have been designed to help the undergraduate students. The qualification criteria for PLUS loans is that the student will have to be already enrolled in an educational program, even if for half time. The students can receive financial aid from college or school, but that may not be enough to cover the costs in full. So, the amount you can obtain in the form of PLUS loan will depend on the cost of attending the classes and the aid amount available from the educational institution.
  4. The Pell grants – The Pell grants are one of the most sought after options as it is a kind of financial aid, more than a loan. The money coming in the form of Pell grants can help pay for a large part of the education. As it is a grant and not a loan, you will no more be required to repay the money. However, not anybody and everybody can obtain funds in the form of Pell grants and that is mainly because, the grants are so very popular. It will depend on the financial condition of your family.

The above are the four most important types of loans available for the students.