College loan parent student

There are a number of students who do not qualify for federal or private student loan on their own basis due to a number of reasons. In such situations parents can help their children by taking loans to help them finance their education. Parents can either apply for federal or private college loans.


Federal college loan student parent

The federal college loan student parent are popular by the name PLUS loans. These loans can most of the times cover up to 100% of the educational costs. These loans are available at low interest rates and are given out on no-need basis. This means that any parent can qualify for these loans.


You just need to have a good credit to be eligible for these loans. However, there are people who even qualify for these loans with credit problems. The interest rate applicable on these loans is 8.5%.


The annual limit on the federal college loan student parent is equal to the cost of attendance minus any other financial aid that you have received. You are required to fill out the FAFSA Financial Aid Application that would be available at the school that you attend.


Private college loan student parent

In case you do not qualify for the federal parent student loan then you can apply for a private loan. These loans are made available in the form of student loans. However, if you do not wish to take these loans as student loans then you can also opt to take a home equity or cash out refinance or a personal loan that can easily meet the cost of education of your child.


However, it should be kept in mind that the private college loan student parent is available at higher interest rates as compared to the federal student parent loan option and you would have to abide by the rules set by the lender In case you are taking the student parent loan against the equity of your house then your loan repayment period can extend to almost 15 years However with private student loan or personal loan your loan terms would be for a maximum duration of 5-7 years.


Which option to choose?

When it comes to deciding which college loan student parent you should take then it can be confusing. Both the options have their own advantages and disadvantages The federal student parent loan is available at better rates and terms as compared to the private. On the other hand you can qualify for the private loan even if you have credit problems.


It is advised that first you apply for the federal college loan student parent and if you dont qualify for it then you can go in for the private funding option.


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