When you realize that low cost student loans are the best financial plan then its necessary for you to find a right kind of loan.

There are two types of student loans one the federal loans and second private student loans. Your first choice should have to be Federal student loans because almost everyone can qualify for some low cost aid.

First Choice Federal Student Loan

When you are set up to get student loans then always try to get one from the federal government first. Government student loans are having the lowest interest rates, the most lenient repayment plans and the most flexible terms. Most of government loans have no credit requirement and government guarantees Federal Loans.

Depending upon your college you may be able to borrow federal student loans through the Direct Federal Loan program in this case the Department of Education will be the direct lender, or from a participating student loan lender in the Federal Family Education Loan Program (FFELP). For that your college will guide you better.

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There are two types of Federal Student Loan programs, one the Direct Federal Loan Program and the other Federal Family Education Loan Program. Both of them are key components of successful college financial aid strategy.

Federal Student loans should have to be a very first step they take in the financial aid process:

• U.S. Department of Education administrates the Direct Federal Loan Program and also acts as lender for the Program.
• The Federal Family Education Loan Program (FFELP) consists of the Stafford Loan, PLUS Loans and Federal Consolidation Loan. This program allows federal loans to be availed through private lenders such as Sallie Mae and Nelnet. Because of private lenders more student gets access to federal loans.

Federal Students Loans are guaranteed by the government that mean if you default on any loan repayment then the government will back the lender financially for the loss.

Best thing about federal loans is that they are affordable and almost everyone qualifies for some aid.

Here are some advantages of the Federal Student loans that make it apart from private loans and other loan types.

There are so many different student loan lenders and retail banks. Choosing best lender from them is simple by asking few basic questions and comparing their terms.

Colleges and universities can tell about the best and preferred lender list of student loan providers on the basis of their past relation with them.

Anyhow to choose a lender that totally depends on you because legally college or university can’t impose any lender upon you.

Three Types of Student Loans Lender

We can divide student loan lenders in three types:

• The Direct Federal Loan Program from Federal Government.
• Sallie Mae and Nelnet and such as other student loan providers for the Federal Family Education Loan Program (FFELP).
• Bank of America, Chase and such retail banks that originate federal loans and sometimes-private loans.

Which Kind of Loans does the lender offer?

The federal government offers the Federal Direct Loan program so you can get only federal student loans.

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