In a moment we'll discuss several reasonable choices among available loans for school. But first let's toss out some really bad choices that some misguided students have made.
Some Poor Choices
First, something we all seem to both love and hate: credit cards. True, they are quick and convenient. Also they can help you out in a pinch. The fact is, you need them just to function in today's economy. Try renting a car or making an online purchase without one! But seriously, for financing your tuition? Only consider them if you have a rock-solid plan to pay them back. Otherwise, credit cards can annihilate you with ridiculous interest rates, late charges and over limit fees.
Check cashing stores are another really poor source of money. The interest rates these places charge are enough to choke a horse! Seriously, if you use these often enough you may never recover. Be honest with yourself, if you don't have the money today, what makes you think you'll have it in 2 weeks? Stay clear of these places!
So how about gambling? There are plenty of exciting games: poker, roulette, one-armed bandits, dice, horse/dog races, and of course the lottery. For the casino owners, gambling is a lucrative business. For you, though, gambling is just a really bad habit to get into. Don't count on it to pay your tuition.
Another character in our rogue's gallery is the title loan, which requires you to sign over your car title as collateral. Expect to get just a fraction of your car's value, while paying a high rate of interest. All too often, the borrower is unable to keep up with the payments and ultimately loses the car. If you are willing to give up your car for much less than its value, why don't you just sell the car and bank all the cash? At least you'll earn some interest instead of paying it.
Some Better Choices
Once you have exhausted your possibilities for getting scholarships or grants, it's now time to shop for the student loans you'll need to cover all the rest of your expenses. So let's have a look at some of the more affordable types of loans for school.
We can place these into two categories: private student loans and government guaranteed loans. Private loans are available through banks and other institutions. Each lender has their own rules, and usually these carry higher interest rates than the government loans. You might need a cosigner, and you probably will need a fairly high credit score to qualify.
Federal loans for school are often available at lower interest rates, can be repaid over a longer period of time, and offer the option to consolidate them after graduation.
There are three categories of government loans: Perkins loans, Stafford loans, and Grad-PLUS loans. Grad-PLUS is short for Graduate student and Parent Loans for Undergraduate Students.
These three have some various rules, but also share several similarities. At ExploreStudentLoans.com we discuss each of these loans in greater detail. One thing they do have in common, though: you must show a need for the money in order to qualify for the loan program. For all of these, you will need to submit a FAFSA (Free Application for Federal Student Aid) form to verify your eligibility.
Should You Get a Scholarship or a Student Loan?
Well, DUH! Who doesn't like free money? A scholarship or grant is far better than a loan. You just might be surprised at how much you can get in grant money that you'll never have to repay. Loans for school can fill in the gaps when you can't get enough of the free money. Try to keep the loans to a minimum, though, and pay them off as rapidly as possible to minimize your interest costs.
A final word of caution is in order here. If the starting pay in your chosen career is relatively low, try to avoid taking out more loans for school than absolutely necessary. If that is the case, you may want to consider working part time to "pay as you go" for your expenses. Many students have graduated with a debt load that proved to be a heavy burden to carry for years. You can voluntarily practice frugality today, or find yourself forced to be frugal tomorrow. The choice is yours.
Got poor credit? Check this out: Student Loans For Bad Credit
For more help finding the best student loans, visit http://ExploreStudentLoans.com
