2 Types Of Graduate Loans

About 2 Types Of Graduate Loans That You Must Know

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Postgraduate students usually pay more tuition than undergraduate students. Therefore, the main purpose of graduate loans is to help finance their education.

There are two places where graduate students can obtain loans for graduate studies: government and private agencies (which provide alternative loans to graduates).

Each is discussed in more detail below.

  1. Government loans for graduates
    This type of loan is the same as a college loan. The only difference is the name. Like students, graduates have the opportunity to obtain a Stafford or Perkins loan from the government.

Stafford Alumni Loans are available to every graduate student regardless of their financial status. There are two types of Stafford alumni loans: subsidized and unsubsidized. The difference between the two lies in who pays the interest.

For Stafford-backed graduate loans, the government pays interest. Students pay interest on unsubsidized Stafford alumni loans, although there is an option not to make payments until after graduation.

Perkins Graduate Loans are available to students who are in financial difficulty. It has only a 5 percent interest rate and can fund up to $4,000 in a graduate student’s education. For graduate students whose economy is very limited, Perkins loans are not a bad option.

However, it must be remembered that payments are still expected to be received immediately and continuously. In extreme circumstances, it is possible to request a loan repayment delay so that one can play normally.

To apply for a Perkins or Stafford graduation loan, one must submit a FAFSA form to the government. After the form is processed, the government will send a Student Assistance Report (SAR) which will provide further instructions on how to apply for the loan.

  1. Alternative Graduate Loans
    Also known as private alumni loans, these loans are loans financed by non-governmental entities. The companies that offer these loans could be banks, credit card agencies, or other companies interested in helping graduate students obtain student loans. The Educational Resources Institute (TERI) is an example of a company that offers this type of loan. This is called the Act Graduate Student Loan Program. Applications can be filled out online at http://gradloans.com. Decisions are accepted in just 15 minutes.

You can try to visit the websites of all the major banks first as many of them offer student loan services. Or you can use a search engine by typing the name of the bank you know. Some banks will offer graduate loan comparison charts to help their clients see how their loans stack up against competitors. This scheme can be an additional aid in your graduate loan search.

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