Advantages of Federal Student Loans
Before you take any type of loan you need to do your research. If you are looking for a way to pay for your education then here are some advantages to Federal Student Loans.
- The interest rate on federal loans is fixed, which means that the payments will not raise or fall according to the market.
- Free insurance is provided for by the government. This means that if you die or become disabled your loan will be cancelled.
- Payments can be deferred whilst you are at school at least halftime. This then means that whilst you are studying you are not required to make any payments, but be aware of the interest that will be added with some loans.
- Students that believe they will be going into low paying jobs or public service jobs can choose to pay monthly at a rate that matches their low income. You will need to apply for income based repayment. With this plan you will not pay more than 15% of your income.
- Students that choose to consolidate their loans with the federal government, apply for income based repayment and continue to make their payments on time can get some of their debts forgiven.
- If you choose to repay your federal student loan early, then you will not be panelized for this like other private lenders.