Graduate student loans can be classified into three main categories. These are the private student loans, federal graduate plus loans, and federal direct unsubsidized loans. Usually, students would only go for private graduate student loans after they’ve exhausted federal options.
Nonetheless, under private graduate school loans, you may meet the criteria for a lower interest rate. This applies only in the case when students have excellent credit. Before you borrow, make sure you take a close look at the estimates for the private student loan rates. Then you can compare these with federal student loan rates to see how the payments add up.
In this post, you’ll find our top picks for graduate student loans. Also, you will get additional information to help you choose the right one that meets your individual needs. By so doing, you can postpone loan payments while you complete your studies.
The Ideal Graduate Student Loan For You
Most likely, the ideal graduate student loans for today’s scholars are federal. With these loans, you are covered by protections like student loan forgiveness programs, repayment plans depending on your income. Even though several private student loans have very attractive packages, they lack these extra features.
Therefore, they can be considered somewhat riskier. In some careers, the protections, as mentioned earlier, come in quite handy. A good example is the Teacher loan forgiveness which benefits students who choose to pursue teaching careers provided they meet the requirements.
Therefore, the profession you intend to choose after school should play a part in determining the best graduate student loan for you. Generally, those who earn higher incomes in the future would be more comfortable going for graduate student loans. Some of these high earner loans are:
- Veterinary school loans
- Medical school loans
- MBA student loans
- Law school loans
Provided you can do quite well with the benefit of federal graduate school loans; you can use a private graduate school loans. Also, they are the best options for you if you or your co-signer has excellent credit. If you plan to use a co-signer, make sure you find a lender that will provide you a release program for a co-signer. Sum up the rest of the information this article to find the best rate that you qualify for.
Unsubsidized Graduate student Loans vs. Federal Direct Grad Plus Loans
Grad students have two types of federal loans to choose from. As stated above, these are the federal direct grad Plus loans and the federal direct unsubsidized loans.
Federal grad Plus loans – These offer higher interest rates. Also, your fees will direct unsubsidized loans.
However, thePlus loans give you more room to borrow. In all, you can borrow up to the amount it costs to attend, without the funds received in aid. You should go for grad Plus loans if your unsubsidized loans are maxed out and you still choose federal student loans as your ideal source of loans.
Federal Direct Unsubsidized Loans – With these, you can only borrow up to $20,500 every year and a total of $138,500 in total. The total figure also includes your undergraduate loans. As limited as they might sound, these loans have way better interest rates. In that, your income-driven repayment cost is less due to the lower interest rates compared to Plus loans.
Hence, you should assess your situation carefully. It is more advisable to take out unsubsidized loans before you resort to Plus loans.
Remember, you can always defer your student loan in graduate school. Keep reading to find out how.
Deferring Student loan in Graduate School
Often, you get the option to postpone the payment of the student loans you took while in undergraduate and grad school. This process is called deferment and becomes necessary when you are a fully registered student or at least half-time.
Though better late than never, never late is always better, and you should begin making payments if interest-only or full payments are something you can afford. This is because the more you wait, the more interest will accrue, whether you took a private or federal graduate student loan.
For students with federal graduate school loans, they may be placed in automatic deferment by your student loan servicer. Either way, you can place a call to your loan servicer or the financial aid office of your school to make a deferment request.
In the case of private graduate student loans, you can make inquiries about in-school deferment from your servicer or lender.
Though the better part of private student lenders provide borrowers with this feature, not all of them do. Therefore, you should always remember to check it during the comparing process of various student debts.
Find some of the best graduate student loans below:
Best options of Graduate Students Loan
- Federal unsubsidized/subsidized loan – A good fit for all borrowers
- Wells Fargo Private Student Loan – Ideal for students with a co-signer or good credit
- Ascent Private Student loan – Best for students with poor credit or a co-signer
- Sallie Mae Private Student Loan – Ideal of borrowers with a co-signer or good credit
- College Ave Private Student Loan – Ideal for co-signer or good credit student borrowers
- MPower Private Student Loan – Ideal for students with a co-signer or no credit
- RISLA Private Student Loan – A good fit for borrowers with a co-signer or good credit
- Prodigy Private Student Loan – Best for students with a co-signer or bad credit
- CommonBond Private Student Loan – Appropriate for students with a co-signer or good credit
In an attempt to emphasize, we have to reiterate that the best course of action is to first borrow federal loans before turning to private student debts. After you’ve hit the limit for your federal options, make the comparison for the various private lenders and select the one with the lowest interest rate. This will help when you go for a student loan consolidation program or any other intervention in the future.
To simplify this dilemma here are some of the best circumstances under which you should take a private student loan – When Private Graduate Student Loan is a good option.
Private graduate student loans are the options to go for if:
- You are positive you are only borrowing what you need.
- Have already maxed out your borrowing from unsubsidized and subsidized federal graduate student loan options.
- You have finished with the Free Application for Federal Student Aid, called the FAFSA, to determine if you qualify for federal loans, federal grants, and work-study.
How to Qualify for Private Graduate Student Loans
There are different private lenders in the United States. Each one of them has its own requirements, which they expect borrowers to meet before they grant a loan. However, most of them take two key factors into consideration. These are:
- Credit score
The higher your income and credit score, the better the rate and borrowing amounts you’ll get. However, in the case of undergraduate borrowers, private lenders usually require them to complete the application with a co-signer. This is because, unlike graduate student loans, borrowers are less likely to have stable credit or income. In some cases, the borrower’s income potential and career path are taken into consideration when the borrower doesn’t have a cosigner. Should you have any questions about students loans, let us know.