The eligibility of student loans depends on the loan type. There are two types of student loan; federal student loan and private student loan. The eligibility criteria of these two loans are different. Read below to have information regarding the student loan eligibility.
What Are Federal Student Loans?
These loans are also popular as government loans that let students as well as parents or guardians borrow money for the college from federal government directly. Federal student loans are offered via the U.S. Department of Education. Students are frequently advised to make use of each and every federal loan options that are accessible to them before they consider opting for any private student loan. Loan forgiveness plan is a key feature that urges students to take federal loans and not private student loans. A federal student loan will never need any co-signer and the rate of interest of a federal student loan is set by the federal government and does not depend on the credit score and history of a borrower. Students are also encouraged so that they estimate their college education expenses before they apply for federal student loans. Thus it will give them an idea of what is required and help them to avoid any over borrowing that will be very beneficial in the future.
What Is The Eligibility For Federal Student Loan?
The eligibility needs for federal student loans are:
- Students need to file the FAFSA or Free Application For Federal Student Aid.
- Borrower should be enrolled for minimum a half-time term.
- Borrower needs to a permanent resident or citizen of U.S. or an eligible non-citizen.
- In case of federal parent PLUS loan, a student need to qualify the criteria of citizenship.
- Federal Stafford loan’s eligibility criteria is independent of any borrower’s credit.
- A good credit score is essential for taking a federal PLUS loan.
- Federal education loan’s eligibility never depends on credit score, ratio of debt to income, least income values or any employment history. But the borrower can never be in default on any federal education loan.
- No least age limit is there for taking a federal student loan.
- A subsidized loan’s eligibility is dependent on the financial requirement of a student.
- The student needs to get enrolled in any eligible course as a regular student.
- The normal eligibility needs for federal student help like Selective Service registration for male student, holding a high school diploma or a GED and maintaining good academic records.
- Federal student loan will not be accessible to any borrower after they graduate like during medical school occupancy or after passing law school.
What Are Private Student Loans?
These loans are given by private loan providers like local banks, national banks as well as online loan providers or credit unions. They are used for covering higher education expenses of a student who is either a graduate or an undergraduate. Some private student loans will also cover additional costs. If you have to complete your occupancy after medical school then there are private student loans that can be taken to fulfil all such obligations. Many loan providers offer private student loans to students as well as parents. Further a student might face difficulty to qualify for a private student loan on himself.
What Is The Eligibility For Private Student Loan?
The eligibility needs for private student loans are:
- Borrower needs to have creditworthiness or have a co-signer who is creditworthy. Greater than 90% of the private student loans are offered to undergraduate students and greater than 75% of them to students who have not graduated. But they require a co-signer with good credit.
- Creditworthiness of a borrower or co-signer is measured by making use of credit scores, yearly earning, ratio of debt to income as well as job history.
- The least legal age of a borrower of private student loan usually depends on the state where he resides. Majority age is 21 in New York and 18 in most of the other U.S. states.
- A borrower and co-signer of a private loan need to qualify the requirements of citizenship. All the loan providers need a co-signer who is U.S. citizen or permanent U.S. resident with a good credit. Most of the loan providers also need the students to be U.S. citizen or a permanent state resident. Some loan providers are seen to allow any international student for qualification if he has a creditworthy U.S. citizen or permanent state resident as a co-signer.
- Most money lenders need a borrower to get enrolled for minimum half-time term. Some offer special loan programs to continue education students.
- The eligibility of a private student loan can also depend on degree, educational major or the school involved.
- A private student loan will never need any student to apply for FAFSA.
So now that you have complete idea of the eligibility requirements of a federal student loan and a private student loan, you can understand which one you will qualify for. Select the most suitable one and apply for that loan by researching well online.