Student Loan: Here Are The Best Student Loans

Student loan
Statement for a Student Loan on a desktop. Loan is PAST DUE with a red rubber stamp. Props include reading glasses, coffee cup and pen. Horizontal photograph. PAST DUE is bright red against the white form. Shot from a high angle looking down.-Istockphoto

One thing about student loans, repayment, and the companies that are involved that gives cause for concern is the fact that not enough students understand how they really work or even how they affect the future goals and plans of the students who take them.

When you are about to graduate from high school, it usually feels like everyone around you wants you to continue your education to college and the next level after that, but nobody will be able to tell you the best way to pay for it.

It is just more or less a kind of expectation that if you want to go to college, you are then going to have to take out a massive loan or even two in order to be able to afford the intended diploma.

Some people who left high school have been broken over time, the reason being that their parents and relatives would not be able to send them to college. Going to college with your friends at the right time could be such a great feeling.

It can be a great way to save yourself the bucket full of tears that may come with not having to attend college. Staying at home with your parents, although it is a way of helping them, can be tiring at the same time.

A student loan is a strategy that the government provides to always be able to help the brilliant, less privileged student so they can be able to attend to their education with other students.

Whether you think it is the right thing to do or not, this article will tell you everything about student loans including repayment and the companies that are involved.

What is a student loan?

 Student loans are quite different from scholarships and grants for students. Loans always have to be paid back and in full, unless you are one of the lucky few who have a part of their loan forgiven. Although it is rare for such to happen, it does.

Scholarships and grants, on the other hand, do not need you to pay them back anytime. You can see it or call it free money. That is right for it. Student loans are also different from work and study programs. Work and study programs are a case where the authority of a college pays students to work on campus even while they attend.

A student loan is, therefore, the money that a student or relative may take out or borrow from either the government or a private lender in order to be able to pay for college requirements and tuition.

The loan would usually be asked of the students to pay them back, and with the company for the interest that builds up over time. The money could usually be used for many things on the campus as far as that is it.

Do I need a student loan?

A student loan is typically meant to help students attend college on credit and to pay back the loan they take back later. If you are a student and you are really concerned about furthering your education at college and acquiring your diploma and degree, it seems as though that is not happening anytime soon because of the financial lack of your parents or sponsors.

Everyone is not and was not born equal. While some can get everything they want at the snap of their finger, others pretty much struggle to get even the little things.

Some students are being forced to even attend a college fully funded by their rich parents or relatives. While some students, on the other hand, cannot be able to attend college, it does not matter it is their utmost desire and wish.

If you fall into the category of students who want to further their education but it seems that is not close to happening for lack of funds, If you are not able to get a scholarship or grant, the alternative is to get and or apply for a student loan.

Student loans should be able to bring such great relief to students who want to go to school. You can go to school without stressing your parents or relatives about fees. It is a great deal to get your education completed while you pay back the whole fund later to the lender, but it has disadvantages that come with it too and you should. look out for it.

Types of student loans

There are two different types of student loans available to you. You can check closely so you can be able to take out the loan suitable for you. There are federal and private loan programs. They both could be poisonous to your future, but there is a difference between them.

The main difference is the fact that the government is the one that issues the federal loan, while a bunch of different sources could serve as a link to get private loans. You can get private loans from sources like banks, schools, credit unions, or state agencies.

Private student loan

If you think that the federal government’s loan for students would waste your limited time, then you can go for a private source. You can go to the bank to request a student loan, or go to the college school if they offer loans or even credit units and other sources.

The important and basic difference you need to know about the private loan is that it is usually more expensive than a loan from the federal.

The student, under a private loan source, would have to start making monthly payments even while they are still in school. It is totally up and left to the lender source to decide all of the terms and conditions of the loan. None would be taken from the student. Furthermore, the student under a private loan solely is responsible for all the interest payments.

You do not expect that you would get help from the government to pay off your loan interest from private sources when you could just get it from them, so every burden is on you.

Federal loan source

Loans made by the federal government, known as federal student loans, usually have more benefits than loans from banks or other private sources.

There are types of federal student loans:

  • Direct Subsidized Loans
  • Direct PLUS loans 
  • And Direct Unsubsidized Loans 

Direct subsidized loan

They are for eligible undergraduate students who are in need of financial help to further their education.

Direct PLUS loans 

The second type of federal student loan is the Direct PLUS loan. This type is meant for graduate or professional students and parents of dependent undergraduate students.

It is made to help them pay for the educational expenses that their financial aid could not cover. Eligibility for this type of loan is not based on financial need, but a credit check is required.

Direct Unsubsidized Loans 

Direct unsubsidized loans are loans made to eligible undergraduate, graduate, and professional students, but eligibility depends on the student’s financial need.

How does it work?

It is important you understand how the business you are about to go into works before you venture into it to avoid it consuming you entirely.

Now here is how student loans and interest works.

A student could make you a prisoner for the next 10 years to 30 years of your life, even though it helped you get through school. If you take out a student loan, then you can calculate the interest based on the terms and conditions if it is from a private source. Federal sources may always give you the time to repay, as in 10 years to 30 years.

The decision to take out a student loan may affect your future if you are not able to pay it back on time and the interest keeps accruing. Sometimes the interest to be paid may be higher than the actual loan amount, which could be disastrous.

It may have sounded like a brilliant idea, but the truth is, that student loans can keep you in debt for as long as possible. Paying up monthly with the little money you could save for something better may not be what you really want. A student loan can save you, and it can do the opposite as well, depending on your ability or inability to repay.

Student loans repayment

The amount you repay is determined by the plan you choose.

Each plan has a weekly or monthly income threshold. You pay back:

  • 9% of the amount you earn over the threshold for plans 1, 2 and 4
  • 6% of the amount you earn over the threshold for the Postgraduate Loan

If your income is below the threshold, you owe nothing. When you make your first payment, interest is added to your loan.

Student loan interest rates

Student loan interest rates vary depending on the type of student loan you have or want to get. Federal loans account for approximately 90% of student loan debt, with interest rates ranging from 4.99 percent to 7.54 percent.

In contrast, average private student loan interest rates can range from 3.22 percent to 13.95 percent fixed and 1.29 percent to 12.99 percent variable. While federal student loan interest rates are the same for all borrowers, private student loan interest rates vary greatly depending on the lender, the type of interest rate (fixed or variable), and the borrower’s credit score.


Student loans may be a heavy burden on your head if you are not able to repay them back, and in time too, as the interest multiplies as time proceeds. Among the two main types of student loans, you may want to pay close attention to which one is right for you if you must go for it.

While private sources of this loan are more expensive, the federal government’s type seems to be more beneficial. A student loan can help a student achieve their goal by helping them fund their education.

If it seems like the parents of the student can not afford their education, if a scholarship or grant is not coming, then a student loan may be the only option you must. While you think about the merits of this loan offer, think also more about the demerits.

FAQs About Student Loans

Can student loan be forgiven?

Yes. Although it rarely happens, if you are lucky, part of your student loan may be forgiven.

Is student loan a good idea?

It is not for anyone to decide for you whether your decision is good or not. But the truth you should know about student loans is that they have advantages and disadvantages which depend on your ability to repay and when.

How is interest calculated for student loan?

Student loan interest is calculated by the amount of time wasted in repaying the principal. If you waste more time, you pay more interest, so typically, your interest increases as long as you wait to repay.

Is student loan any good?

Yes. While the depth that comes with student loans is a big problem, the peace of mind it gives students is the good part of it. It also helps enable students who, it may have seemed, would not be able to further their education to do so.

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Yes. While the depth that comes with student loans is a big problem, the peace of mind it gives students is the good part of it. It also helps enable students who, it may have seemed, would not be able to further their education to do so.

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