Student loans have become a huge problem in the United States. It’s not just students who get caught in the trap; parents also find themselves with tens of thousands of dollars in student loan debt.
With the recent changes in the economy, many families are finding themselves struggling to make ends meet. This means that they may be forced to borrow money from private lenders such as banks and credit unions. However,
these loans often carry higher interest rates and fees than federal government backed loans. In addition, private lenders tend to offer fewer repayment plans and more flexible payment terms.
If you’re looking for the best way to finance your education, then read on. I’m going to tell you everything you need to know about private versus public student loans.
Best place for student loans: Private Loans vs Federal Loans.
If you’re borrowing money for college, or school, you have two main options: go into debt to get a federal grant/loan (like the ones offered by Sallie Mae student loans or the department of education loans); or go into debt to get an unsecured private loan from a bank.
The benefits of getting a federal loan is that there are no deductions when you file taxes later, it’s easier to pay off than a private loan,
and it’s more likely that you’ll receive a decent rate of return. On the other hand, if you do end up defaulting, the government will seize your tax refunds,
your Social Security benefits, and even take legal action against any assets you own.
Sallie Mae student loans
Sallie Mae’s student loans can help you pay for college or graduate school bills. You can apply for their student loans through FAFSA.
Pros:
– Low interest rates
– No prepayment penalties
Cons:
– Higher application fee than most private lenders
– Application process takes time
Department of education loans
The Department of Education loans offers that are guaranteed by the U.S. government. They are available to both undergraduate and graduate students at all levels.
Pros:
– Lower interest rates than private lenders
– No prepayment penalty
Cons:
– More expensive than private loans
– Requires a good credit score.
Take away
In conclusion, if you have student loan debt, you’re not alone. There are millions of Americans saddled with tens of thousands of dollars’ worth of debt from college. But there are ways to pay off your loans without going into bankruptcy. Here are three steps you can take right now to begin paying down your debts.
First, find out where your student loans are being serviced. Second, contact your lender and ask for a lower interest rate. Third, apply for any available federal programs that will reduce your payments.
And finally, talk to a credit counselor to see if he or she can help you come up with a plan to pay off your loans.
Keywords: Department of education loans, Sallie Mae student loans
