These loans carry different loan terms and different requirements. According to the student situation and his family’s, qualifying for a particular loan may be easier or a lot harder. Thus, knowing beforehand what you can do and what you can’t, will save you a lot of time and hassles as you transit this college financing search process.
Unsubsidized Student Loans
There are both secured and unsecured unsubsidized student loans. Unsubsidized student loans are regular student loans not backed up by any institution or by the government. The lender of unsubsidized student loans is a regular profit organization than intends to benefit from the lending process. Thus, the interest rate charged for the money lent will be according to market conditions and will depend on the applicant’s credit score and history as well.
The interest rate will be higher on unsecured loans and lower on secured loans due to the less risk that loans with collateral represent. Nevertheless, unsecured student loans are probably the lowest rate unsecured loans on the loan market due to the fact that the applicant is, after all, a student or the student’s parents.
Subsidized Student Loans
When it comes to subsidized student loans, the interest rates are even lower because a non profit organization or the government, supports financially the lending transaction reducing the costs of the loan.
This is done in order to promote education on different levels and specially investigation on certain fields that the lender is particularly interested in.
There are mainly two systems by which subsidized loans are awarded: according to merit, according to needs. The first group of subsidized loans is meant for awarding certain students that have had an exceptional performance on previous studying levels so as to promote someone with exceptional capacities and generate knowledge value and certain fidelity to the institution.
The group of loans that are awarded according to the needs of the applicants (mainly federal student loans), are meant for underprivileged students with little or no economic possibilities that wouldn’t be able to afford college studies without this government or private institution aid. The idea is to contribute to generate equal studying opportunities for all in order to eliminate differences and award further funds for investigation or post-graduate studies only according to merit.
In order to know if you qualify for a subsidized loan, you need to contact the different government agencies and private institutions so as to get explanations on their programs as each program has different requirements. You can do so easily by doing a quick search on the net for subsidized student loans.
If you know that you won’t be awarded a subsidized loan because you can afford repayment of a private student loan, you can also search the net for student loans and compare loan quotes in order to decide which loan best suits your needs.