Reasons for Taking Out Federal Student Loans
The interest rate on federal student loans is fixed and usually lower than that on private loans—and much lower than that on a credit card! You don't need a credit check or a cosigner to get most federal student loans.
Which is a benefit of a subsidized federal student loan grace period? It postpones any interest charged or payment due on the loan.
Federal student loans usually have lower, fixed interest rates that stay the same for the duration of the loan. Private student loans can have either fixed rates that stay the same or variable rates that can change over time. It's important to understand the different interest rates and how they will impact your loan.
The interest rate is fixed and is often lower than private loans—and much lower than some credit card interest rates. View the current interest rates on federal student loans. The interest rate is fixed and may be lower than private loans—and much lower than some credit card interest rates.
You can consolidate a consolidation loan only once. In order to reconsolidate an existing consolidation loan, you must add loans that were not previously consolidated to the consolidation loan. You can also consolidate two consolidation loans together. But you cannot consolidate a single consolidation loan by itself.
No credit check or cosigner is required to qualify for most federal student loans. Repayment doesn't begin until after you've left college or dropped below half-time enrollment. The government may pay interest on certain loan types if you demonstrate financial need.
-Federal loans offer flexible repayment options and loan forgiveness programs. Private loans have few repayment options and no loan forgiveness programs. -Federal loans don't have to be repaid until you graduate or drop below half-time status as a student.
Final answer: The true statement about federal student loans is that they offer more flexible repayment terms compared to private loans. Federal loans do not require credit checks and cannot be dismissed through bankruptcy.
Grace Period Impact on Credit
The biggest advantage offered by a grace period is the financial flexibility. Paying off the balance within the grace period reduces the amount of outstanding credit reported to credit bureaus.
Explanation: The correct answer is: Loans are required to be paid back even if the student passes away before repayment. All other options listed are benefits of Federal Student loans. These loans offer deferred payments while in school, no prepayment penalty, and fixed interest rates.
Aidvantage is a federal student loan servicer that manages loans. You can reach their customer service department at: 800-722-1300.
Federal Loans have a pre-determined, fixed interest rate which is often lower than those offered through private loans. The interest on Direct Subsidized federal loans is paid by the government as long as the student is enrolled at least half-time, as well as through the grace period.
Make sure you understand how interest is calculated and the fees associated with your loan. Both of these factors will impact the amount you will be required to repay. Remember that interest rates and fees are generally lower for federal student loans than private student loans.
Understanding student loans can be complicated, but knowing the key differences between federal and private loans can guide your decisions. Federal loans offer lower fixed interest rates, more flexible repayment options, and are easier to access than private loans, which come with higher rates and less forgiving terms.
Pay Off High-Interest Loans First
With this approach, you pay off your loans from the highest interest rate to the lowest. You make the minimum payments on each balance except the highest-rate loan. You also make an extra monthly payment based on how much you can put toward the debt.
When loans are consolidated, any unpaid interest capitalizes. This means your unpaid interest is added to your principal balance. The combined amount will be your new loan's principal balance. You'll then pay interest on the new, higher principal balance.
$57,500 for undergraduates-No more than $23,000 of this amount may be in subsidized loans. $138,500 for graduate or professional students-No more than $65,500 of this amount may be in subsidized loans. The graduate aggregate limit includes all federal loans received for undergraduate study.
Direct Subsidized Loans: You won't be charged interest while you're enrolled in school or during your six-month grace period. Direct Unsubsidized Loans: Interest starts accumulating from the date of your first loan disbursement (when you receive the funds from your school).