Direct Loans 101
Direct loans are convenient, flexible and
simple. A Direct loan is a loan by a lender to a customer without the use
of a third party. This type of loan enables the lender to have greater
discretion in the distribution of loans. Typically the lender is the U.S.
Department of Education rather than a bank or financial institution. The
federal government provides four types of direct loan financing.
These direct loans vary in criteria and
repayment schedules:
The Federal Direct Subsidized Stafford/Ford
Loan is a direct loan, which means you do not pay the interest on the loan
while you are school at least part-time. This particular type of Direct
loan is based on the student financial need in accord with federal regulations.
The Federal Direct Unsubsidized
Stafford/Ford Loan is a direct loan the government charges you interest
while you are in school. The student does not need to be in extreme financial
need to receive this type of loan.
The Federal Direct PLUS loan is
a direct loan designed for parents without an adverse financial history
who wish to borrow money for their dependent student. In order for a student
to be dependent he or she may not be 24 years or older, a graduate or professional
student, someone with legal dependents, an orphan or a ward of the court.
Parents of independent students are not eligible to apply for this type
of loan.
The Federal Direct Consolidation
loan is a consolidation of one or more federal loans combined into a direct
loan. A single monthly payment is made to the U.S. Department of Education.
It is to the student s advantage to consolidate, due to lower interest
rates.
Direct loans give you the simplicity of
having one contact for concerns with your financial assistance. You are
able to have access to your Direct loan information on-line 24 hours a
day, 7 days a week. You are given the flexibility to choose your repayment
options and are able to change your schedule as your needs change.
Author: John Williams
Check out the direct loans blogger at
http://directloans.blogspot.com
He reviews direct loans and interprets complicated financial data into
simple to understand language.
Debt Consolidation Resources:
|
