After you receive all of the free money for college that you possibly can, how will you pay for the balance? Most students have to take loans to cover any additional cost of living or tuition fees. It’s bad enough that you will be starting out in debt after college – you don’t want to also end up stuck in a loan with terrible terms. Let’s take a quick look at the three main sources for loans and how to tell if the loan is a good or bad deal.
- Federal loans – While FAFSA can help you to get federal money for free, you can also take loans that need to be repaid to the government. The good news is that the rates are fixed for this type of loan.
- State loans – Local government may also offer loans. These can sometimes have an even better repayment rate than federal loans, so be sure to look into state programs. Sometimes the programs are funded by non-profit organizations.
- Private loans – This includes everything from bank loans to peer-to-peer lending. Private loans usually have the highest interest rates and the strictest terms for paying back the loan. Be particularly careful when sourcing this type of loan.
Pay attention to things like the interest rate, any fees that may be associated with the loan, the terms of repayment, and the flexibility of the loan (just in case you struggle to pay it back).
Your Source for College Financial Planning Support
College Planning Source is here to help you plan ahead for college. It all begins with an assessment to see what you and your family require. Contact us today at 858.676.0700, or you can fill out an assessment request form here.
