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Stafford loans
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The federal government gives out Stafford loans to students that have already got admission in a certified educational institute. The student is supposed to pay back the loan after completing the graduation.
These loans can either be subsidized or unsubsidized. With these loans the interest rates are charged only when the repayment period starts in case you are taking a subsidized loan. But with unsubsidized loans you would have to pay the interest as soon as the loan is given out.
For taking a Stafford loans you are required to approach a lender. When looking for lenders for Stafford Loans you should make sure that the lender sells his loans to Sallie Mae. Sallie Mae is the Student Loan Marketing Association. When looking for Stafford Loans you should know that there are a number of banks and financial institutions that offer these loans. Besides the financial institutions the credit unions also offer Stafford loans. Getting a loan from these organizations is a wiser option.
When choosing a lender for Stafford loans it is very important that you look for the benefits that the lender has. Also make sure that before you sign up for a loan with these lenders you know the front and the back end benefits. When the lender offers front benefits it can help you save money in the beginning of the loan. In such cases the loan would include lower origination fees, minimal or no guarantee fees; a discount on the interest rates.
In case the lender offers back end benefits then you can enjoy the benefit of lower interest rate on every payment that you make on time. In case you consider loan consolidation with the same lender then the lender can give you an offer of fixed interest rates. There are a number of lenders that would have facilities like electronic transmission of funds with this the funds are processed faster.
When taking an unsubsidized Stafford loan you should make sure that the lender capitalizes the interest rate. When the lender capitalizes the interest only once then you can save money but he if capitalizes the interest frequently then you would have to pay more interest on the loan. So before signing on the loan contract makes sure that you have asked the lender how often he capitalizes the interest rates.
There are many lenders that would hire servicing agencies that
would handle the payment processing and the customer services in the secondary market. It is of importance to know in which secondary market the lender gives out his customer service to. When you know this you can have an idea as to how the customer service is going to be. There are some lenders that would hire 24 hr service providers and these would provide you with a detailed status of the loan at any time that you ask them. You should make sure that the lender has the best customer service.
When taking the Student Stafford Loan it is the duty of the borrower to make the payments on time. There are many lenders that would help the borrower in remembering the payments and this would prevent the borrower from defaulting on the loan. Defaulting on the student loan means that you would not have made payments over 270 days. There are lenders who have special programs designed to help students from defaulting on the loans. You dont know what your financial condition would be after some time when you have to start repaying you loan hence it is advised that you should take the services of a lender who has special services for defaulting.
Before you select a lender for the Stafford loans you should do a lot of research. When taking a Stafford loan you can visit the website of the lender and make sure that you compare the offers given by various lenders. Most of the schools provide a list of authentic lenders that should preferred. When you select a lender that is preferred by the school then this can make your processing faster as compared to when you take a loan from the lender whom you select. Selecting the right lender for the Stafford Loan is as important as selecting the school in which you want admission.
Selecting a lender can be a difficult task and you should be careful with the loan that you are taking. Make sure that you have read the terms and conditions of the loan before you take them. Besides before you take the loan make sure that the lender also provides a debt consolidation program. This should be confirmed in case you cannot pay back the loan on time then you can consolidate the loan with the same lender. Student loan consolidation with the same lender can have various advantages but it should be considered only when there is a lot so amount due on your Stafford loan.
When taking a student Stafford Loan you should keep in mind that you deal with the same lender throughout the duration of the course. If you have all the loans with the same lender then this can make your repayment of the loan easier. This is also advised since if you need to consolidate the loans in the future then this can be advantageous as you would have to make only one payment and also the interest rate would be lower. So when taking a Stafford loan you should be careful with the lender whom you select to deal with. Other Articles |
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