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Unsubsidized Student Loans

September 3, 2011

Unsubsidized Student Loans

Unsubsidized Student Loans

Unsubsidized student loans are basically the opposite of subsidized loans in which you pay interest on your loan right out of the gate, as well as you do not have to prove that your at the utmost financially needy state as you do with subsidized loans. With the interest, one can either pay interest payments while in school or pay on them after school is over, but it is suggested that you pay while in school because it will accumlate on your loan total and make you pay more in the long run if you don’t. Unsubsidized loans are offered through 3 different loan programs being:

  1. The Federal Stafford Student Loan – 2012 and beyond, the interest rate will drop from 6.8 percent to 3.4 percent.
  2. The Perkins Student Loan – Loan interest rates are as low as 5 percent.
  3. PLUS Loans both for students as well as parents of dependant students
  4. For private lenders, unsubsidized student loans are all that they provide

How to Apply For Unsubsidized Student Loans

If you are looking to obtain an unsubsidized loan to help with schooling, there are a one thing in which you must do when it comes to applying. This one thing is filling out a Free Application of Federal Student Aid also known as a FAFSA. This application not only will figure out which loans you are eligible for as well as let you know if you qualify for any other government financial aid like grants and scholarships, which unlike loans, they never have to be paid back. This is imperative that you fill out a FAFSA and can provide much value to you in many forms of financial aid.

Repaying Unsubsidized Student Loans

Unsubsidized student loans repayment comes in 4 different methods that you can choose from depending on what your financial situation is as well as how fast you want to pay off your loans. Here are the 4 methods in which you can repay your unsubsidized student loans.

  1. Standard Repayment – This option allows one 10 years to pay their debt off with payments being the same each month.
  2. Extended Repayment – This method of repayment allows one 12 to up to 25 years to pay off their debt and you can start with very low payments with this option.
  3. Graduated Repayment – This payment method lets you start with a low monthly payment and it increases after a certain amount of time, usually being every 2 years.
  4. Income Sensitive – This option is fairly new and your montly payment is based off of how much you earn, which is usually 15 percent of your monthly income.

This is a main overview of what you will ecounter with unsubsidized student loans. Although unsubsidized student loans are offered with both federal and private agencies, it is a good idea to apply for federal unsubsidized loans first as they offer lower interest as well as are in general more lenient. If you are still looking to apply for an unsusidized loan for school than do it as soon as possible because funds are given on a first come first serve basis.