Federal Stafford loan is a federal student loan that is available to both undergraduates and graduates. This loan can cover all your education and related cost and cab be given to US citizens, permanent residents and other eligible non-residents.
Federal Stafford loan comes in two versions - subsidized and unsubsidized. In case of subsidized Stafford loan, it is the responsibility of the government to pay all interest on your loan while you are enrolled in school (at least half-time school). You will start paying the interest and principal only after the elapse of six-month period from the time you graduate or withdraw from the college. To avail this loan you must show proof of financial needs.
In case of unsubsidized Stafford loan, you can opt to defer paying the interest while you are in school. But unlike subsidized Stafford loan, the government won’t help you in making the payments that you have to do on your own.
The benefits of this low interest student loan are many. After full disbursement, 1 percent reduction of principal is done automatically. When you graduate and shows proof of it, an additional 2 percent principal reduction is done.
Borrowers of this loan receive a .25 percent reduction in interest rate when they sign up for auto debit of their loan payments. After making the first 48 payments on time and consecutively, principal is reduced by five percent. Thus you can save lots of money if you pay on time and regularly. There is no prepayment penalty nor is credit check required.
If you want to get more details on various types of student loans, you navigate to the student loans directory on the site map. You can also apply for student loans through this portal.
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