Education Loans

2007-10-15 12:53:47

( Financial )



The Difficulties of Saving for Education

To get into a promising career, you need to have a good solid education. But quality education may be out of reach for you because of its prohibitive costs. Unless you are under a scholarship program or have a deep pocket, you may not afford to get into the best schools in the country, and will be forced to settle for less prestigious institutions to complete your education.

Ideally, you and your family should start saving for education as early as you can. But if this is not possible, you can look into education loans as means to support your school expenses.

Education Loans for Your Scholastic Needs

Both federal and private institutions provide loans for college or private school education. Like mortgage loans, education loans are payable within a certain period of time.

Federally-sourced education loans have even more affordable rates and terms than their private counterparts. You could enjoy some breaks with federal loans that are otherwise not available under other mortgage types, such as longer terms and deferment options in case of any future financial difficulty you might experience.

Your credit history is the single most important factor in determining your education loan terms and conditions. Eligibility for some types of federal and private education loans also depends on the school and the number of credits you are enrolling in.

Applying for Education Loans

Before applying for education loans, you may want to find out if you qualify for any government or school sponsored grants. For free, you can apply for federal financial aid or FAFSA by submitting information about your financial standing and how much you can actually shell out from your family's total income to pay for your education. You will receive feedback by mail from the government about your scholarship grant and student loan eligibilities, if any.

If you feel that what the federal government has offered you is inadequate for your educational needs, you can also apply for supplementary education loans with private lenders.

Precautions for the Borrower

The whole point about education loans is that you must never borrow more than you can actually pay for. As much as possible, avoid deferring your loan payments as this will only add up to future obligations and may get out of control.

Just like any other loan, your education loan needs prompt payment and proper management. You must be disciplined in keeping up with the loan terms and conditions. Failing to do so will cause adverse marks in your credit record and may disqualify you from further borrowings.


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