Student Loan Choices For School Tuition
If you’re trying to further your education, the government can help. Several federally backed student loans are available to people with little or no credit. They can help you get an education and build your credit rating as you repay it.
These federally funded are available through your school and credit isn’t normally an issue. The Stafford loan is one such option. Most lenders do not check a student’s credit history when they apply for a Stafford loan.
Another example is the Perkins loan. Your credit history is not checked for a Perkins loan either, the government backs the loan but it is awarded to those with the greatest need so you may or may not qualify.
Perkins and Stafford loans are set amount awarded each year. Students who find they need additional funds can ask their parents to apply for federally funded PLUS loans.
PLUS loans are backed by the government, so lenders – who may be the government or a financial institution – do not check an applicant’s credit score. They do take into consideration, an applicant’s record of loan payments to see if any were late and/or if they are in default. In such cases, you might not qualify to receive a loan.
Also, with government backed loans, payments can be deferred in special situations and you may be lucky enough to receive rock bottom interest rates. The loans must be repaid.
If you don’t pay back your student loans, the government doesn’t mess around. They have the option of hiring a bill collector, confiscating your federal tax refunds or go as far as garnishing your wages.
Additionally, student loans are usually not forgiven, if a borrower declares bankruptcy. All things considered, if you need a loan for school, government-backed loans are a good option, especially if you have not established credit yet.
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