Last week, I covered free money. This week, I'm going to talk about borrowing money!
You borrow money for many things in life: cars, houses, home improvements, etc. Borrowing money shouldn't be taken lightly, but don't discount it right away. A house will hopefully increase in value over time due to improvements and such; in the same way, educating yourself will make you more marketable and more hirable. You are increasing your value by educating yourself. Borrowing money should be seen as an investment in yourself. Loans are good tools to get where you want to be--employable.
Let's jump right in--I want to cover all the different types of loans. Here we go!
You borrow money for many things in life: cars, houses, home improvements, etc. Borrowing money shouldn't be taken lightly, but don't discount it right away. A house will hopefully increase in value over time due to improvements and such; in the same way, educating yourself will make you more marketable and more hirable. You are increasing your value by educating yourself. Borrowing money should be seen as an investment in yourself. Loans are good tools to get where you want to be--employable.
Let's jump right in--I want to cover all the different types of loans. Here we go!
The loans that are the most common and have the lowest interest rates are federal student loans. Eligibility is determined by when you fill out the FAFSA. The two types of federal student l
Federal Direct Loans
Federal Perkins Loans
The types of federal student loans most students work with are direct unsubsidized and direct subsidized loans. The difference between these two loans is that with subsidized loans, the loan does not build interest while the student is in school. With the unsubsidized loan, the loan builds interest.
The Perkins Loan is based on financial need. Make sure your school participates in the Perkins Loan Program, as not all schools do.
Compare different federal loans below with this handy-dandy chart!
oans are Federal Direct Loans and Federal Perkins Loans. Let's look at the difference.Federal Direct Loans
- Direct Subsidized Loans are loans made to eligible undergraduate students who demonstrate financial need to help cover the costs of higher education at a college or career school.
- Direct Unsubsidized Loans are loans made to eligible undergraduate, graduate, and professional students, but in this case, the student does not have to demonstrate financial need to be eligible for the loan.
- Direct PLUS Loans are loans made to parents of dependent undergraduate students to help pay for education expenses not covered by other financial aid.
- Direct Consolidation Loans allow you to combine all of your eligible federal student loans into a single loan with a single loan servicer.
Federal Perkins Loans
- The Federal Perkins Loan Program is a school-based loan program for undergraduates and graduate students with exceptional financial need. Under this program, the school is lender.
The types of federal student loans most students work with are direct unsubsidized and direct subsidized loans. The difference between these two loans is that with subsidized loans, the loan does not build interest while the student is in school. With the unsubsidized loan, the loan builds interest.
The Perkins Loan is based on financial need. Make sure your school participates in the Perkins Loan Program, as not all schools do.
Compare different federal loans below with this handy-dandy chart!