529 Plans

According to school boards in the US, loans make up for 54% among the financial aid options available. Among these loans, College federal loans have shown to be the most promising ones. From a wide variety of available loans, you'll easily find one that suits your different needs. In order to be fair the government will sort you into their need-based loans or non-need based loans. Finally we will go over which type of loan is the most common so you can see why federal college loans should definitely be among one of your first options if you intend to get a loan for your studies.

Just to give you an idea, that are four different types of federal loans that are available to you. Federal loans include Perkins, Stafford, Parent PLUS, and Graduate PLUS. Everyone of these loans have their own advantages and disadvantages but one thing they have in common is the attractive interest you get from these loans. An important thing to notice is all these loans are backed by the government so you feel safer knowing that you are not dealing with the bank. Since the loan comes from the government, they will sort out your need for the loan into two categories.

The first category which is known as the need-based loan consists usually of a low-interest loan. The most typical type of loans that goes at this category are the Federal Perkins Loan, the Federal Subsidized Stafford Loan, and subsidized direct loans. To qualify for this type of loan you need to send your family income to the free application for Federal student aid (FAFSA) and you need to apply early because it's a first-serve basis. Usually you should apply after January 1 of the year you plan to attend college. The other category is regarding non-need based loans.

It's still a federal college loan but in this case you don't really need it. Some will go for it so they have extra money for their college education but unlike the need-based loan, you're required to repay the principal immediately upon graduation. The reason is because you didn't need the money in the first place so you should have enough at the end of college to pay it back. These type of loans usually have higher interest so if you don't really need, you should skip the federal loan. Just in case you need or want to loan you still have to go through a credit check and of course the FAFSA to get approved. With all these loans available to you are probably wondering which one is the best?

There is no best federal loan since it all depends on your own needs but there is one loan that is more common than the others. Stafford loans are the most common loans used in college. Why? Because this loan offers fixed rate, low interest and is available to full-time or part-time graduates in accredited schools. The easiest and safest choice to choose, this will be the option for most students will go for these days.

Getting accepted for a federal college loan is pretty simple when you meet the requirements. The government only requires you to prove your lack of income and they will offer to help. Since these are usually the best rates you will find, it's a good idea to start with federal college loans. There is no right or wrong among loans since in the end you will get money in short period of time and will have paid back over a long period of time so it's up to you to decide if you want to pay more or less every month and if you want to pay quickly or slowly.