Essential Tips for Securing Student Loans

Guidelines for Applying for Student Loans

When considering student loans, focus less on the total debt and more on the actual repayment amount. Not all graduates end up paying the full debt, as some may have their loans forgiven after thirty years. Federal direct loans are among the most common options, with interest rates set by the government. These rates are fixed and remain unchanged throughout the life of the loan, though they may vary yearly.

Repayment depends on your income. Once you graduate, repayment starts if your earnings reach a certain threshold. A percentage of your income will go toward loan repayment, but if you earn below a specified level, payments may be deferred.

Types of Federal Direct Loans

Subsidized Loans

Unsubsidized Loans

What is a Subsidized Loan?

This loan type accrues no interest while you're in school, during grace periods, or authorized deferments.

The government covers the interest during these periods.

Exceptions exist where interest payments may be your responsibility, so verify with your loan provider when applying whether your loan is subsidized or not.

What is an Unsubsidized Loan?

You are responsible for all interest accumulating on unsubsidized loans from the moment funds are disbursed.

The interest begins accruing immediately after disbursement, even while you're still in school.

Maintain at least a half-time student status as defined by your institution to stay eligible for the loan.

Similarities Between Subsidized and Unsubsidized Loans

Both incur approximately 1% fee on the loan amount.

Interest rates are fixed for both types.

Disbursement processes are managed by educational institutions.

Signing a promissory note is required for both.

A six-month grace period exists before repayment begins.

Top 5 Student Loan Refinance Providers in 2023

With numerous lenders available, comparing rates and terms is vital. Credible offers quick, no-credit-check quotes in under two minutes. Here are five leading student loan refinancing companies:

Citizens Bank: Offers flexible repayment terms of 5, 10, 15, and 20 years, with fixed and variable options.

College Ave: Provides tailored refinancing options, including fixed and variable rates, suitable for students and graduates.

CommonBond: An early innovator in loan refinancing with a mission-driven approach to lending.

Earnest: Known for its adaptable repayment plans, allowing borrowers to select any monthly payment and term between 5 to 20 years.

SoFi: A well-established lender offering additional benefits like unemployment protection and career support programs.