While discussing the most common type of student loan and others, we must not forget the very importance in the offering of students loan among students of different backgrounds and motives. Student loans are a common way to help finance your college education.
These loans come in several types, each with pros and cons. Before making a decision, look into all of the different types of student loans to make sure the option you choose is the right one for your circumstances.
The Most Common Type of Student Loan
As others have not been mentioned but are acknowledged as variously available, the question is which one of the types of student loans is the most common? Look no further here is the most common type of student loan and others which had been said before:
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Federal Student Loan
Federal student loans come with low fixed interest rates and extensive borrower protection, so it is generally best to consider these loans first. However, private student loans have higher loan amount limits and can be a good alternative if you need to borrow more or do not qualify for federal loans.
There are two main types of student loans: federal and private.
Within each type, there are several loan options intended for different types of borrowers. Direct Subsidized Loans, for instance, are available only to undergraduate students with financial need, while Direct PLUS Loans are meant for parents and graduate students. Each of the student loan types have limits on what you can borrow.
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For instance, the maximum you can borrow annually with a Direct Subsidized Loan and a Direct Unsubsidized loan is from $5,500 up to $12,500. Graduate or professional students can borrow as much as $20,500 annually using a Direct Unsubsidized loan.
Types of the Popular Federal Loans That Are Available to Students
Below are the types of common type of student loan and others which are known to be available and up for reach to students in the university:
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Direct Subsidized Loans
Direct Subsidized Loans are available to undergraduate students who have demonstrated financial need. These loans do not accrue interest while the borrower is in school, during the six-month grace period or any deferment period afterward.
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Direct Unsubsidized Loans
Direct Unsubsidized Loans are available to undergraduate, graduate and professional students. Borrowers do not need to demonstrate financial need, but these loans accrue interest immediately. This means that you’ll be accruing interest during school, after you graduate and during periods of deferment and forbearance.
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Direct PLUS Loans
Direct PLUS Loans are available to graduate or professional students and/or parents of dependent undergraduate students to help pay for education expenses. Direct PLUS Loans (also known as graduate PLUS loans and parent PLUS loans) carry higher interest rates and higher loan origination fees than Direct Subsidized and Unsubsidized Loans.
Types of Private Student Loans
The door to borrow from private lenders doesn’t offer nearly as many choices. There are, in fact, only two options:
- Private Student loans
- Private Parent loans
Private loans differ, depending on the lender and conditions each one sets. The rates on private loans can be fixed or variable. Some private loans require payments while you are still in school.
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Health Professions Student Loans
Specialized student loans exist for students studying specific areas of medicine such as nursing, dentistry, optometry, sports medicine, or veterinary medicine. Each loan has its own requirements about accepted areas of study and financial need.
