Loan Pros n' Cons Chart

index of available college aid options

Pros	Loan Product	Cons
No Credit Checks since the funds are guaranteed by the federal government, your credit report is not used in qualifying you for the loan: see qualification parameters Low Interest federal student loans are fixed rate loans that remain fixed for the entire term of the loan; current rates are lower than most other financing options: view rates Flexible Repayment Plans student loan payments do not have to be repaid until 180 days after you leave or graduate from school. The federal government offers flexible repayment plans that can fit your budget. You can even consolidate your federal loans into one, low repayment plan	Stafford Student Loans you must apply through your school	Low Amount Limits the biggest disadvantage of Stafford loans is the limited loan amounts — only $5,500 for first-year, dependent students. Very small amounts considering the cost of education: see loan chart Requires Federal Filings you must file the FAFSA form with the federal government in order to apply for Stafford loans. The FAFSA filing is used by colleges to determine your financial aid award: see FAFSA Multiple Borrowings you have to file and apply for a loan each academic year. Limited Use of Funds your Stafford loan is processed by your college to pay tuition, books, and housing. You cannot use your loan to pay other education-related expenses.
Pays the Entire Cost parents can borrow up to the total cost of education minus any financial aid received by the student: see product information Now Available for Graduates and Professionals graduates and professional students can borrow on their own behalf up to the total cost of education minus any financial aid received: see product information Low Interest federal PLUS loans are fixed rate loans that remain fixed for the entire term of the loan; current PLUS loan rates are about the same as most other financing options: view rates Flexible Repayment Plans The federal government offers flexible repayment plans that can fit your budget for parents: loan payments begin 60 days after disbursements have been made to the school. for graduates: payments are deferred until after graduation.	PLUS Loans for parents for graduate students for professional students you must apply through your school	Loan Must be Repaid by the Borrower the loan is underwritten for the parent or graduate; the parent or graduate is responsible for repaying the loan Requires Federal Filings you must file the FAFSA form with the federal government in order to apply for PLUS loans: see FAFSA Credit Check Required in order to qualify for the loan, you must pass a credit check as set by the federal government Multiple Borrowings you have to file and apply for a loan each academic year. Graduates Must Use 3tafford Loans First graduates and professional students must first apply for the annual loan maximum eligibility under the Federal 3tafford Loan Program before applying for a Graduate/Professional PLUS loan. This will give you many different loans that you will need to manage: use our loan tracking sheet to manage both Stafford, PLUS and other loans.
Fills the Gap since the cost of college can be higher than most financial aid awards, private student loans are used to fill the gap between cost of education and financial aid received Quick Processing unlike federal loans that are processed through the college, the processing and distribution of funds is through the student thus speeding up process time: see product information Availability of Funds private student loans can be used for most education-related expenses such as personal computers and other related supplies No Federal Filing you do not have to file forms with the federal government in order to apply for private student loans. Private student loans are perfect for students who need additional funds to close a gap or pay for additional study	Private Student Loans or dial: 1-866-813-7760 Special Benefits Through Our Partner	Credit Check Required you must have a credit history and verifiable income in order to qualify for this loan; since many students do not meet these qualifying parameters, a co-applicant may be required on the application Rates May Be Higher depending on your credit strength, private student loans generally have a higher interest rate than federal student loans. Rates are variable and can change monthly either up or down: see product terms and rates Multiple Borrowings you have to file and apply for a loan each academic year.
Total Independence you do not need to file federal forms or work through the college processing systems; you simply use your home equity credit line to pay all related college expenses (up to your assigned credit limit): view product information Low Interest Rate depending on your LTV position, your interest rate can be as low as the PRIME rate or lower Flexible Repayment Plans you can use your equity line to draw upon funds as needed while the student is attending school. By depositing your income into the equity line account, you can repay the borrowed funds at minimal cost: see illustration One-Time Application you only apply once for your home equity line; you can draw upon available funds anytime you need money regardless of student's time in school Use Funds for Anything you can use your home equity for any expense; you are not restricted on use of funds	Home Equity Credit Lines	Credit Check Required you must have a credit history and verifiable income in order to qualify for this loan. You must also have enough equity value in your home to secure your loan: calculate your LTV value Home Is Your Security your home equity is secured by the equity value of your home; you could potentially lose your home if you default on your loan payments Rate May Be Higher depending on your LTV position and amount borrowed, your interest rate may be slightly higher than PLUS loan rates: view Plus Loan rates view home equity rates Funds May Be Limited the amount you can borrow depends on your LTV value of your home; if your equity value if low, you may not have enough borrowing funds to pay for college expenses: calculate your LTV value