If you are worried that bad credit will stop you from going to college, then this article may help you find your way through college. Although it is true that it is much easier to find student loans with good interest rates if you have a great credit rating, but even if you have a bad credit rating you don’t need to panic and give up your hopes. There are loans that cater for bad credit students.

The Stafford Loan

Let’s take the example of the most famous US Department of Education loan, the Stafford loan. Making use of common sense, the US Department of Education assumes that most applicants will be going to college straight from high school, and will not have a credit rating as yet and therefore, Stafford loans do not even consider the credit rating a factor when it comes to qualifications.

The Perkins Loan

The Perkins loans, which are for the most deserving and neediest students also maintains the same rule. Thus students with bad credit ratings should not refrain from trying for loans. The only way that Bad credit rating can interfere with your loan process is if you have defaulted on a federally granted student loan in the past.

PLUS Loan

It is also possible to get a bad credit student loan if your parents have a good rating. A PLUS loan is a loan that is granted to parents instead of the students. They are intended to cover the amount of fee that the parents are obligated to pay towards the total cost. Student loans such as Stafford and Perkins loans that are granted by the US Department of Education are based on this policy, assuming that the parents will pay a certain amount of their child’s college fee.

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There are many types of loans students can apply for, but the simplest categories are the two: federal student loans and private loans. All loans funded by federal government are administered through the US Department of Education‘s Federal Student Aid programs. These are one of the easiest loan types to get student loan consolidation services. These federal programs spend approximately 60 billion USD each year in the form of loans, work-study support and grants. Stafford loans are the best and most popular form of federal loans intended for students. However, there are numerous types of other federal payment plans also such as military / ROTC plans to pay for college.

Private student loans are managed by standard lending institutions. Citibank student loans and the Sallie Mae Signature student loans are the two most common ones in this category. These lenders actually offer unsecured (and in certain cases secured) loans to the students, and mostly include higher interest rates in their terms than other federal counterparts in the business.

You can combine both private and federal loans, along with scholarships, to support your education. But always remember never mix the two types together while consolidating student loans. It’s a rule that you should always give priority to your federal loans while consolidating then separately consolidate your private student loan debt. The main advantage you can get by consolidating your federal loans is: a lower interest rate, which changes each of 1st July; it increases the time for loan repayment to thirty years reducing the monthly burden as well as the number of lending institutions you pay each month.
Trends?

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As the global economy deteriorates, its effect can be felt everywhere. Even the students are not protected from its affects, especially those looking for financial aid. Here’s a list of some financial aid and student lending resources to help the students.

• Fin Aids calculators can help students to estimate the total cost of schooling and the amount of financial help required. it also has basic information about different types of loans, scholarships and military aid.

• Student Loan Browser Assistant is a project of National Consumer Law Center provides further opportunities for those students who already have loans and who want to know about other options available to them and the rights they have. It also has information about federal student loan rehabilitation, bankruptcy with reference to student loans and collections. Thus it is a good website for those students who are having problems paying their loans and are looking for some legal assistance.

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