Student loans are availed by almost every student these days, as they involve substantial college fees, which people are not capable of playing in a lump sum amount. Therefore, they go for better options, such as scholarships and loans. These loans provide excellent assistance to students willing to go abroad as well. They do not have to pay for the college admission fee, tuition fee, textbooks, and living expenditure.
Commercial banks or non-banking units avail their expenses and ask for the repayment of loans after the student gets a well-secured job as per his completed course and degree. Sometimes, the government provides a relaxation period of a few months after the completion of the study to find a suitable job to elevate the stress of repayment of the availed loan from his mind.
Advantages to avail a student loan for further studies:
- Less rate of interest: The loan schemes that come under the federal category of student loans, charge very less or no amount of interest from the students. These loans are a far better option, designed by the government of respected countries for the welfare of their citizens. If they charge interest, the rates are fixed for the whole duration until repayment, unlike private loans. The government also pays the interest of the student if he fails to pay them back. But this is not accessible in case of private loans.
- Don’t require co-signer: Due to the credit score-free nature of the federal loans, the student will not require a guarantee or co-signer to avail of a federal student loan. He will also not need any kind of collateral security to be submitted against the loan amount.
- No credit score: The student loans do not check your credit history because you were underage then, making it easier for you to avail loan facilities.
- Waiving options: When the student opts for a federal loan, he will get his loan written-off in case of not getting employment even after completing his studies.
- Low fees: When the colleges or universities notice that the student has taken a loan from the government, they might give some exemption in the price as well.
By considering these points, as mentioned above, it is clear to state that federal student loans are way better to go for, rather than private loans. The government is not supposed to charge a high rate of interest to make it easy for the students of their country to do better in educational fields.