Thousands of new students enroll in college every year. While this means that there are thousands of new people looking to begin their lives with excellent careers, it also means that thousands of new student loans will be taken out. While there are loans for all people from both government and private lenders, many people are unfamiliar with different student loan terms, which can lead to poor choices when it comes to choosing a loan.
When it comes time for a student to go to college, there are a number of loan options. Scholarships are always the best option, as they need not be repaid. For the billions of dollars in education costs that are not covered by scholarships every year, however, there are student loans. Government loans are often the best option, but there are different options even within this group.
Government student loan terms are perhaps the most lenient for students. All government student loans offer students the option to not repay until after graduation. This is true for both subsidized and unsubsidized loans, though unsubsidized loans will continue to accrue interest during this period. Government loans also tend to have lower interest rates than private loans.
As with any loan, it is important to read the terms of your loan carefully. Different lenders have different repayment requirements. While government student loans have rather uniform requirements and terms, private lenders are generally free to set their own terms. By being fully aware of all student loan terms, you can determine if the loan you are applying for is something that you will be able to repay without accruing added interest or falling behind.
Whether you choose a private or government loan, and whether you use your own credit or that of your parents, understanding all terms of the loan is important. Not only will it help you ensure that you can repay your loan, but it will also make you aware of any deferment or forbearance options that are available to you in the event of disability or loss of income. Many loans have provisions for such situations. In short, student loans are a necessary thing for many people, and can in fact be an excellent investment in your future.