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With the various types of college loans available to student today, it’s hard to determine which student loan is best for you. Therefore, we took the liberty of creating the chart below to show you the advantages and disadvantages of each loan available. Don’t forget to complete the pre-loan application above to receive a free student loan quote once you find the best student loan option for you!
The advantages of taking out a federal loan are as follows:
- Its interest rate is low and guaranteed by the government (usually 2-5% lower than that of a private loan)
- It offers a grace period
- Forgiveness option is available
- Less stringent rules concerning deferment of payments
- Not credit-based
The advantages offered by a private loan, on the other hand, are the following:
- No FAFSA requirement
- Can apply online and obtain a response in minutes
- Money is disbursed directly to the students, typically within 5 business days
- Can usually borrow a greater amount because the loan is not federally-regulated
- Deferment of payments while in school
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Federal loans |
Private loans |
Stafford |
Perkins |
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Interest rates |
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Fixed interest rate at 6.8% for loans created after July 1, 2006 |
5% fixed rate |
Variable interest rate |
Fees |
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Up to 2.5% in fees (including a 1.5% federal origination fee and a 1% federal default fee) for loans first disbursed July 1, 2007-June 30, 2008. |
None |
Fees Vary |
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Annual loan limits |
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First Year Dependent: $3,500 |
$4,000 |
$1,500 Minimum Limit |
Second Year Dependent: $4,500 |
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$40,000 Maximum Limit |
3rd and 4th Year Dependent: $5,500 |
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First Year Independent: $7,500 |
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Second Year Independent: $8,500 |
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3rd and 4th Year Independent: $10,500 |
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Aggregate loan limits |
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Dependent: |
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$23,000 |
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Independent: |
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$46,000 |
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Repayment begins 6 months after student graduates, withdraws, and becomes enrolled less than half time student. |
Repayment begins nine months after student graduates, withdraws, or becomes enrolled less than half time. |
Flexible repayment options available |
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Browse additional student loan information:
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