Federal School Loans Vs Private Loans – Which is Better?
Author: RJ Licata Most people need some sort of outside funding to help pay for their college education. When looking for student loans, you have two choices. You can apply for federal loans which are backed by the government or you can seek money from a private lender. Each method comes with benefits and drawbacks, so it’s hard to say which one is better. This article will explain the benefits of each and help you decide which is right for you. Federal School Loans Federal school loans are government regulated. This means that the lenders have to abide by strict rules when it comes to repayment terms on your loans. For example, interest rates on federal school loans are set at a ceiling by the government and the lender cannot exceed that rate. They can go lower than that, and in some cases they do in order to stay competitive with other lenders, but they must stay below the max. This is good for the borrower because when they take out a federal loan they know what to expect with their
Author: RJ Licata Most people need some sort of outside funding to help pay for their college education. When looking for student loans, you have two choices. You can apply for federal loans which are backed by the government or you can seek money from a private lender. Each method comes with benefits and drawbacks, so it’s hard to say which one is better. This article will explain the benefits of each and help you decide which is right for you. Federal School Loans Federal school loans are government regulated. This means that the lenders have to abide by strict rules when it comes to repayment terms on your loans. For example, interest rates on federal school loans are set at a ceiling by the government and the lender cannot exceed that rate. They can go lower than that, and in some cases they do in order to stay competitive with other lenders, but they must stay below the max. This is good for the borrower because when they take out a federal loan they know what to expect with their
