Many college students opt for loans these days to pay for the high cost of education. In 2019, 65% students had borrowed loans according to U.S. News. So today we have gathered up some benefits of borrowing federal student loans.
No Credit History Needed
Almost every loan from a financial platform for example a bank must require a credit history. But luckily, such policies aren’t applied to student loans. In order to successfully apply for a student loan, the students family needs to fill out the Free Application for Federal Student Aid.
Fixed Interest Rates
A federal student loan’s interest rates are fixed. Which subsequently refers to that they don’t change over the life of the loan. The main benefit of a fixed loan is that the borrower is free of any sudden increments with their monthly payments if the interest rate rises. Although private loans do contain variable interest rates in them.
Interest Payments May Begin After College
Students who borrow federal loans with a genuine financial need receive a subsidised federal student loan. That means that a student doesn’t pay interest as long as they are enrolled in a college. In such cases, the government is liable to pay the interests on the students’ behalf.
Payment Grace Period
Students who borrow federal loans do not have to start repaying their loans until after leaving college. This means that as soon as the student leaves college, they have a six month grace period before the payments begin. Now if they leave the college by graduating or some other reason, the grace period will still be given.