Things to know when applying for student loans
When it’s time to apply for student loans, think less about the massive debt and more about how much you actually need to pay back because in reality not everyone will pay the whole thing and some graduates might get away by paying nothing while the entire debt is forgiven after thirty years. The direct loan is a common federal loan. The interest rate on a direct loan is set by the federal government and has some terms and conditions, which are also set by the government. While the rate may change from one year to another, the interest rate that you are given when you apply for student loans is fixed for the life of your loan. It depends on how much you earn. After you are a graduate, you have to start repaying your debts if your earnings are up to the mark. A certain percentage will go as per paying your debts. So, if you earn less, you pay nothing.
What are the two different types of direct loans?
What is a subsidized loan?
- A subsidized loan means that no interest is accruing while you are in school, in a grace period, or when you have an authorized deferment.
- During that time for you, the government is actually paying the interest on these loans. However, there are a few exceptions when the government pays the interest on your subsidized loans.
- When you apply for student loans, ensure that you check with your loan service provider on whether your loan’s interest will be subsidized.
What are unsubsidized loans?
- On the other hand, if you have an unsubsidized direct loan, you are responsible for all the interest that accrues on these loans.
- Also, this interest starts accruing as soon as the funds are disbursed. The basic life cycle of a federal direct loan starts when you are in the school of course, but in school, status means different things to different schools.
- So, when you apply for student loans, just ensure that you maintain your school interpretation of at least half-time status.
What are the similarities between subsidized and unsubsidized loans?
- Both charge fees of about 1% of the loan amount.
- Both have the same fixed interest rate.
- Both loans put the schools in charge of dispersing the funds.
- The same promissory note is to be signed.
- Before the repayment begins, there is a six month grace period.
Which are the 10 best student loan refinance companies?
With all the student loan refinance companies out there, you should compare the rates and terms when you apply for student loans. Credible is a good platform to compare. You can get your quote with no credit check in two minutes or less. Here are the 10 best student loan refinance companies:
- Citizen bank: It offers a variety of loan terms that include 5, 10, 15, and 20-year repayment term options as well as fixed and variable rate loans.
- College Ave: Unique student loan products and viable refinancing options are provided by this company to students. This company is a recently started renowned lender offering both fixed and variable rates when you apply for student loans.
- CommonBond: CommonBond is one of the first student loan refinancing companies. It has a unique giving approach to its lending-funding promises to each and every loan it refinances.
- Connext: Connext private student loans could offer the loans you apply for at favorable interest rates even if you are trying to refinance the existing student loans at low interest rates. For the upcoming semester, you need a few thousand dollars in cash.
- Earnest: It’s one of the most flexible student loan refinancing companies available in the market. This company offers the ability to pick any monthly payment and term between 5 to 20 years. It results in saving you more than the standard rates and terms.
- Laurel Road: It focuses on medical and dental graduates. They have loan options that will work for any loan borrower.
- LendKey: This is a student loan refinancing lender that pools money from community banks when you apply for student loans. It also partners with credit unions to provide good-priced student loans to borrowers.
- PenFed by Purefy: This company has some of the lowest students refinance rates, and they keep getting lower and lower.
- SoFi: This is the most well-known company that is one of the original student loan refinancing lenders. SoFi also offers borrowers with unemployment protection and even has a career support program.
- Splash Financial: They are doing great things with medical school student loan refinance, even though they are a relative newcomer in this list. This company lets you apply for student loans with no original fees and unique repayment plans.