Loans

[glitch]

I'm new to this loan thing and trying to figure things out. I have a few questions and I hope I don't get flamed.

1. How do you go about getting a stafford loan? (If I can do it online what's the link)

2. What is the difference between a subsidized and unsubsidized loan?

3. Finally, what does it mean to consolidate your loan?

---

Members don't see this ad.

 

[mshheaddoc]

Staffords:

subsidized the government pays the interest while you're in school your interest will start accruing on this account when you start repayment of your loan. You don't have interest that accrues while in school or deferment.

unsubsidized interest starts accruing on the loan from day 1. You can choose to pay off this interest while in school/deferment or you can have it capitalized (added to your loan) when you go into repayment. This will increase you loan amount and "compounds" your interest so many choose to try to pay off the interest before going into repayment. Not everyone can though.

Step 1: Fill out FASFA online

Step 2: Your school will receive and send you financial aid award letter with further instructions

Consolidation is putting all your loans into one "big" loan to make ONE payment at a fixed rate (locks your interest rate - currently staffords are variable and change every year at July 1 - as of last year they went to 6.8% fixed in repayment though so variable rates are only true for those loans before 2006.) It also averages out your interest rate using weighted averages. So if you have $500 at 10% and $100 at %5 your interest rate would be 8.25%. There are calculators to figure out your weighted interest rate, it takes the amount and interest and figures out everything for you.