Student loan vs bank loan Research Paper Example | Topics and Well Written Essays - 1000 words - 1

Student loan vs bank loan - Research Paper ExampleA majority of students applies for federal loans. However, there has been an sum up in the number of students applying for bank student loans. The federal political sympathies determines the fixed interest rates of the federal student loans, while the lender determines bank student loan rates. The lender determines the fee to be supercharged on the principal amount, and this is based on the assign rectitude. Students who are apply for Stafford and Perkins loans to require credit worthiness but those applying for the PLUS loan require no previous adverse credit. Considering the pros and cons of each option, it becomes challenging to get back whether students should apply for the federal student loans or the bank student loans.There have been price wars some the federal loans and bank loans for students as reported in the media in recent times (Andriotis 1). One may argue that the bank loans for students are actually cheaper t han those being offered by the federal government. A few years back students prefer to have loans from the federal government because the rates were subsidized. This means that in the case of a rise in the interest of the federal loan, the students rates were not affected. The students were allowed to pay the amount that was agreed. Many students preferred federal student loans because they are easy to qualify for compared to banks (Clark 1). The bar set for by the federal government understands the need of students to have the money to pay for education. Banks on the other hand need assurance they leave behind get their money back. This means that to access money from a bank the qualifications are quite high. The credit history of the student should be clean. The students should also have a repayment ability convincing nice to the bank before accessing a bank loan. This means the students should have a source of income, which is highly incredible in most cases. The bank will r equire financial information on