subject: Sallie Mae Student Loans – How Do They Work? [print this page] Sallie Mae Student Loans How Do They Work?
Considered as the largest and primary private education lending company in the United States, Sallie Mae has provided financial support and assistance to over millions of students since 1972.
Today, it is very difficult to sponsor your college education and many people turn to lenders for help and support for their college tuition fee. Sallie Mae student loans are provided to students who may not have funds for their higher education. These loans are useful in paying for college tuition and other related expenses. Sallie Mae offers two loan types to its borrowers; private loans and federal loans.
Federal Student Loans
Federal student loans are generally granted by the government and come with a fixed interest rate. These loans are available to almost anyone and do not largely depend on credit history. It only requires the student to be enrolled in a recognized university or college to be eligible for the loan. These federal loans usually come with the best interest rates and repayment terms and policies. Federal loans are generally of two types; Stafford Loans and Federal Perkins Loans.
Perkins Loans are usually funded by the government and granted by the school, college or institution that the student is enrolled into. Also, it is not necessary that all education institutions participate in the Perkins Loans, which is why not all of them would offer Perkins Loans. In the case that a student's institution does not offer Perkins Loans, the student can get Sallie Mae student loans. Sallie Mae would provide with the money, or may act as a guarantor for the lender. In the case of a guarantor, the chances of getting the loan approved increase significantly.
Federal loans may also be given to the parents or the legal guardians of the student. Sometimes many financial institutions that offer private student loans may also offer federal loans. Federal loans require the student to fill FAFSA (Free Application for Federal Student Aid).
Private Student Loans
Generally, getting a private loan is easier and less stressful than getting a federal student loan. Private student loans do not require the student to fill in a FAFSA form; yet, private loans may require a credit history, either of the student, or their legal guardian as a cosigner of the loan.
Sallie Mae student loans are also available as private student loans granted by Sallie Mae itself. It may only require some evidence of school expenses and the payments are usually deferred until completion of education. Before getting any loan, it is important to shop around.
