5 Reasons To Start With Federal Student Loans

If you are under the impression that all student loans are created equal, you are wrong. There are differences between federal student loans for college and private student loans for college, and the differences could end up saving you money. Applying for a private student loan, or using a credit card for college expenses may seem more convenient than filing FAFSA (applying for federal student loans), but the truth is, by skipping over federal student loans, you will spend more money on your college expenses than you may need to. Take a look at 5 Reasons to Start with Federal Student Loans:

5 Reasons to Start with Federal Student Loans

1. Federal student loans offer the lowest interest rates. Federal student loans offer some of the lowest interest rates available, which makes them less expensive than most private student loans. You may not be too concerned about interest rates at the time you borrow the loans, but you will when it comes time to repay them.

2. Federal student loans are not based on credit, private student loans are. If you have little credit or poor credit, it will be difficult for you to obtain a private student loan at a good rate and/or without the help of a creditworthy cosigner.

3. Federal student loans will offer you better repayment options. Private student loans are not regulated in the same way federal student loans are, and therefore private lenders do not have to be flexible with their repayment terms or offer you any alternative repayment options at all.

4. Federal student loans will offer you the option to consolidate. Private student loans can also be consolidated, however many private lenders are no longer consolidating private student loans. With federal student loans, you will have the option to consolidate through the federal program if you choose.

5. Federal student loans are eligible for forgiveness. With federal student loans, the federal government will cancel all or part of your loans in exchange for things such as volunteer work, military service and working specific jobs with certain communities (plus meeting other requirements within the loan forgiveness program).