90% of the students who belong to middle-class families feel the need of taking loans from banks to complete their studies. The bank offers the students the required sum of money to finish their post-secondary or higher education. The government, therefore, looking toward the needs of the students introduced a special loan only for the students and termed it a ‘student loan’. The student loan covers all the education-related expenses of the student. Here we will see about Are student loans fixed or revolving?
Student loans are fixed and do not revolving. Federal student loans have a fixed interest rate on them. Due to this students can get their loans easily. The rate of interest in case of student loans does not fluctuate during the life of the loan. However, the interest rate which the government decides on a particular student loan does not depend on your credit scores or financial history.
A student loan is a sum of money which any student borrows for supporting his education. Student loans cover fees for the college, books, supplementary study materials, and housing expenses during the period of education of the loan borrower. The government has specifically designed this loan for students. Student loans are different from any other loans. The eligibility for getting a student loan is not that typical and the student gets the receiving amount in no time. The government has made extended bars on the time of replaying of the borrowed amount. Also, the interest rates are much lower on student loans as compared to any other loans. Student loans differ from time to time.
Student loans in the United States
Student loans in the United States are fixed. The government offers its students two types of loans here. First, federal loans which the federal government sponsors. Second, are private student loans which are provided by schools. Private student loans include state-affiliated non-profits. It also includes institutional loans. The majority of student loans are federal loans. Federal loans come with two options subsidized or unsubsidized. Subsidized loans do not attract interest rates till the student is in school. The government or the institution offers student loans to the students as part of financial aid, grants or scholarships. The interest on student loans is generally non-deductible. If we compare, federal student loans are less expensive to private student loans. The federal government has a Federal Direct Loan Program and under this program, the federal government offers direct loans to its students. However, private loans do not come under this scheme. Students face fewer losses on the term of student loans. This means that bankruptcy cases do not have to do anything with the students. Failures to repay the amount lead the student to default.
How can students apply for student loans?
There are approximately 1,000 banks involved in providing student loans to students in need of a loan. To apply for loans, students can approach Stafford loans when they require loans for their education. There are certain specific documents required for applying for the student loans like you require:
- Application form filled beforehand (online or offline).
- Two passport size photographs.
- High school mark sheet.
- Intermediate or secondary education mark sheet.
- KYC detail documents.
- Document with Identity proof.
- Document with home address.
- Document with age proof.
- Document with signature proof.
- Document with income proof of the parents.
For students who are international everything is the same just a few more documents like:
- Copy of scholarship letter(optional).
- Proof of admission to the university.
- Copy of foreign exchange permit(optional).
- Statement of the bank account for the last six months.
What courses are eligible for student loans?
Students can approach for student loans if they have applied for the courses like:
- PhDs and Doctoral Programmes.
- Undergraduate degrees.
- Diplomas and special courses.
- Certificate courses.
- Postgraduate degrees.
- Diplomas and special courses.
- Engineering diplomas.
- Certificate courses from ITI.
- Data entry operator course.
- Agri diploma.
- Job oriented diploma.
- Computer certificate course.
What are the factors that the bank takes into account for providing loans to the students?
Banks readily provide loans to everyone. However, there are a few things that the banks take into consideration for providing loans to the students which are:
- Academic history or background of the student.
- Choice of course.
- Name of the university or any educational institute.
- Details about co-borrowers.
Student loans are very beneficial for students who come from middle-class families. The fixed nature of the interest rates or the loans provides the satisfaction of debts to the borrower and his family. The borrower has to fulfil some criteria to get the loans required by the student. The student loans always include all the scholarships, grants and financial aids that any university or college could provide. For international students, the procedure may be a little longer but is similar to that of residential students.
Frequently asked questions
- From where can I get an application form for a student loan?
You can easily get the forms online. Make sure to check the recognition of the course you have applied for and the amount of the loan.
- How much loan can I get from a student loan?
The maximum amount that you can get is $5,500-$12,500 per year.
- Can I extend my student loan?
Yes! You can do so but the higher extension may lead to lesser lending by banks.