There are two types of student loans that you may have to learn first. There is the federal student loan option and then there is the private student loan. Just by the sound of it, according to Bruce Mesnekoff, you should already have an idea on which of the two is more affordable. The federal student loans do not have very high interest rates while the private student loans could really be expensive. It is important also to take note of the fact that with federal student loans, you have more chances of getting a reprieve whenever you are remiss in your payment obligations.
Because of the clear advantage of federal student loans, you would surely choose these over the ones being offered by private lenders. However, the decision does not stop there. You also need to compare the advantages and disadvantages of the three basic federal student loans. By doing so, you would certainly get an idea as to which of the three you should choose. Actually, you really do not have to stick to just one federal student loan. You may acquire all three if you want but Bruce Mesnekoff thinks that this is clearly a bad idea if you do not have the means to pay back.
The three federal student loans are Federal Direct Stafford Loan, Federal Direct PLUS Loan, and Discover Undergraduate Loan. In the Federal Direct Stafford Loan, the borrower would actually be you as the student. In the Federal Direct PLUS Loan, it is the parents who are the borrowers although it is their dependent child that benefits from it. The Discover Undergraduate Loan, on the other hand, has the student himself as the borrower. In this case though, he is required to have a co-signer. This information is important for those who are applying for any of the three loans.
It is very important that you get to know the interest rates of the three federal student loans says Bruce Mesnekoff. This could be the bases of your decision of choosing one over the others. Of the three, it is the Federal Direct Stafford Loan that has the lowest interest rate at 4.66%. This interest rate is fixed. The Discover Undergraduate Loan has a variable interest rate, from 3.49% to 8.74%. It also has fixed interest rate of up to 11.24%. On the other hand, the Federal Direct Plus Loan has a fixed interest rate of 7.21%.
With the information mentioned above, you may already have an idea on which federal student loan you should choose. However, these are not enough. It is still very important that you get to learn more about the details of each loan. This is to make sure that you would not have any regrets on the choice that you would make later. An informed decision is usually one that you would never worry about. If you want to know more about federal student loans, Bruce Mesnekoff could provide you more ideas.