Subsidized loans are loans that are available to students who need financial support. Your school determines the amount you may borrow and it can not go over your financial need. The U.S. Department of Education pays interest on subsidized loans. Unsubsidized Loans are available to undergraduate and graduate students; there is no requirement to demonstrate financial need. Your school determines the amount you can borrow based on your cost of attendance and other financial aid you receive. You are responsible for paying interest on these kinds of loans at all times. Private loans are offered by private lenders like banks and are used when you still have a gap between your cost of attending a school and the financial aid and/or federal loans that you have been awarded. Private student loans generally cost more than those you would receive from the federal government. To pay off a student loan of $20,000 with an annual interest rate of 4.2% with a monthly payment of $200 it will take about 123 months to pay it all off.
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