Direct & FFEL PLUS not No Cosigner Student Loans
Both loans are used to pay for education. Both loans can only be obtained by parents or graduate students. Payments for both loans can begin either sixty days after the loan is made, or within six months of the student leaving school or graduating – or dropping below half time status.
Both loans have the same eligibility requirements for the students and are federal student loan programs, and both PLUS loans require the parent or graduate student to have an excellent credit rating. This is exactly why it may not be used for students who need bad credit student loans no cosigner included to qualify. If an applicant for the Direct or FFEL PLUS student loan programs have really bad credit, they will not be approved for this student loan with no cosigner involved in the transaction. They will need a cosigner for the loan to be approved. The only item on their credit report which may decline even the cosigner who has good credit is any outstanding delinquent federal loan they may have. The federal loan would have to be paid off first to qualify.
Direct loans are made by the Department of Education, while FFEL loans are made by private lenders, such as banks or credit unions. Direct loans are paid back to the Department of Education, while the other type of loan is paid back directly to the private lender which have their own qualifying guidelines.
The amount of each type of loan is the same, with the same maximums applying to both. This amount is determined by taking the cost of the education and subtracting other financial aid and contributions that are available for that education. The total is the total that you can get on your loan, as long as it doesn’t exceed the maximum allowed.
It is important for parents and graduate students to understand that you cannot apply for or receive both types of loans for the same school period. For example, if your son is enrolling for the coming fall semester, you cannot apply for both types of loans to cover the expenses of that semester. However, you can apply for one type of loan for that school year, and then the other type of loan for the following school term.
The interest that is charged for each type of loan is different. While the interest may differ from year to year for each type, you are locked into the interest rate at the time of the loan. In most cases, the Direct PLUS loan has the lowest interest rate, but this isn’t always true. It is also important to realize that once you’ve met the maximum with one type of PLUS loan, that maximum is also applied to the other type of PLUS loan – you cannot exceed the maximum by maxing out the one, and then maxing out the other.
Typically, a parent or graduate student will go with FFEL PLUS loans only if the interest rate for that year is lower than the Direct PLUS loans. However, if the parent has ever defaulted on any type of student loan as mentioned above, they may not be eligible for the Direct PLUS loan, and may need to have excellent credit to get the FFEL PLUS loan instead.
Even though the FFEL PLUS & the Direct PLUS Loan programs cannot be used for bad credit no cosigner student loans, it still has its place to help students pay for college and is one financial tool that works well for many when students need to pay the larger college bills such as tuition, room & board and books to just name a few. It can pick up and finish paying where other loan programs have fallen short on covering the remaining college student’s bill.
Bad Credit Student Loans No Cosigner
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