Different types of student loans listed here include everything from the private lender loans to the subsidized federal loans. Although at first glance these loan types seems confusing , you can easily choose the one which exactly suits your situation. Let me tell you what sets these loans apart. Read on.

Basically we can categorize the student loans into 2.

I.            Federal loans

II.            Private loans

5 Different Types Of Student Loans



1. Subsidized Federal Loans

These loans are awarded to the students solely based on their financial situation. You can apply and get these loans from the credit unions, banks or even directly from the federal government. This loan is one of the most favorable types of student loans when it comes to pay off your college education. Subsidized student loans carry a very low interest rate. Federal government subsidize the interest as long as you are in college or school . Loan amount can be repaid on a long term basis under certain circumstances.

2. Unsubsidized Federal Loans

It is yet another types of student loans that can be repaid on a long term basis. Here the interest rates will not be subsidized as in the case of the subsidized student loans. The borrower will be sole responsible for the interest accrued during the loan period. At times, it becomes possible to postponed the payment. Unsubsidized loans also carry a low interest rate. This type of loan is  best suit for those who don’t qualify for the other federal financial aids and for those who need some more money to meet their expenses in addition to the (subsidized Stafford loan). Any student who is classified as independent can get qualify for the Unsubsidized Stafford Loans

3. Federal Plus Loans

This loan is offered for the parents whose children are about to attend  undergraduate college either in full time or half-time. Federal plus loans carry a low interest and it is awarded based on the attendance cost and credit history. Generally the repayment term starts immediately after the graduation or after 2 to 3 months of full loan disbursement. If you run out of cash even after utilizing the above 2 federal loans, federal plus loan will help as a useful tool to cover up the remaining costs.

4. Federal Perkins Loans

These loans are most suitable for both graduate and under graduate studies. Its awarded based on the extreme financial needs. Although it carries a low interest rate, the disbursement amount is comparatively low when compare to all other types of students loans. Interests will start to accrue in the middle of the half time enrollment. As these loan repayments are reported to all 3 major credit bureaus, every single late payment will be documented and cause a potential damage to your credit history. In reverse when you pay on time it will  help you build the credit scores.

5. Private Lenders

These loans should be chosen only when you fail to obtain all other financial aids. Private lenders offer so many different types of student loans based on the prime rates. It is wise to shop around and get approved from the private loan lender who offer loans at best possible rates. Every financial institution has their own norms and are these are different too. So make sure you understand their terms and conditions before you sign in any of their agreements.

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