Compare Student Loans to Save

If college is around the corner for you, you will need to compare student loans. Student loans may enable you to attend school when it otherwise would be impossible. Getting the best student loan for your situation is important. Therefore, you will have to do a lot of research in comparing your student loan options. Here are a few things to consider when looking at student loans.

Subsidized vs. Unsubsidized

One of the most important things that you need to understand when comparing loans is the difference between subsidized and unsubsidized student loans. Both of these types of loans are made available by the federal government. While you are in school, the interest on your loan balance is accumulating. When you have a subsidized loan, the government will actually pay that interest for you while you're taking classes. This will allow you to finish school with only the principal on the loan. Nothing else will be accumulated on top of the balance and it will help give you a head start on your financial life. 

With an unsubsidized loan, the interest is not paid by the government while you are in school. The interest will accumulate while you are taking classes. You have the option to make the interest payments on your own while you are in school, or defer any payments until you get out of school. This will make your loan balance much larger by the time you are done with school as compared to a subsidized loan. 

While subsidized student loans are the superior choice for you, you may not qualify for them. Approval for a subsidized loan depends on your financial situation. You and your family can not make more money than is allowed to qualify. If you make more money than the threshold, you will have to get an unsubsidized loan. 

Federal vs. Private

Another important difference between federal and private student loans is the terms of the loan. Federal student loans are the most common form of student loans in the industry. Federal student loans are provided through the government at very low, fixed interest rates. With federal student loans, the lending decision is not based on your credit history. This allows the vast majority of people that want to go to school to be approved for the loan that they need. 

With private loans, you will usually be required to pay a higher interest rate. The lending decision with a private student loan is based upon traditional lending criteria. They will look at your credit score and your ability to repay the loan. If your credit score does not meet the requirements that are set forth by the lender, you may not qualify for the loan. You may be required to pay a higher interest rate for the loan if this is the case. You have many options out there for private student loans and you can shop around for the best deal.


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