Saint Louis Banking Rates

Explanation of Student Loan Types

Higher education can be very expensive. Students require money for not only tuition, but books, supplies and housing as well. The expenses really add up

If you’re planning to attend college, you will most likely need a loan or maybe several. Saint Louis Banking Rates can provide you with a comparison of low student loan interest rates that are currently available locally, nationally and online. It’s possible to find a student loan rate that matches your budget.

Saint Louis Banking Rates explains what the most common types of student loans are to help make your search easier:

Certified Student Loan

A certified student loan is paid directly from your loan account to your school to cover the balance of your bills. Sometimes, the school will even automatically deduct however much is needed every semester. Most certified student loans are federal loans. Aside from the simplicity of processing these student loans, the interest rates are also usually lower.

Non-Certified Student Loan

Non-certified loans come in the form of private student loans. These types of loans are commonly referred to as “alternative college loan financing.” They are funded by private lenders, such as banks. Private student loans are considered to be an option for students and parents who have exhausted all of their efforts in receiving federal assistance. The loans are paid directly to you so you have more flexibility in how you will spend the money.

Subsidized and Unsubsidized Federal Stafford Loans

Subsidized Stafford Loans are specifically for students that demonstrate financial need. “Subsidized” means the government will pay the interest on the loan while the student is in school. The loan is long-term and offers low interest rates. Unsubsidized Stafford Loans are also available to students without a financial need. The interest payments are the responsibility of the borrower.

Federal Perkins and Federal Plus Loans

Parents of half- to full-time undergraduate students may obtain a Federal Plus Loan. They are awarded based on the cost of attendance and credit history. Parents may only obtain this loan to pay for the educational needs of a dependent student.

Federal Perkins loans are for students with an extreme financial need. This is why the interest rates are very low for Perkins loans. However, there is a limited amount of funding available to be awarded, resulting in generally small loan amounts.