Subsidized and unsubsidized student loans come under the well known Stafford student loan program. Stafford loans are offered to students in two different forms and unsubsidized Stafford loan is one of those. Student loans are offered to students based on the type of course for which they are enrolled. Stafford loans are offered to both undergraduate and graduate courses. Subsidized Stafford loan is made available only for undergraduate students whereas unsubsidized Stafford installment loans bad credit can be availed by undergraduate as well as graduate students. A brief explanation about the unsubsidized Stafford loan is provided further.
Unsubsidized Stafford loans – Overview
As mentioned earlier, unsubsidized Stafford loans are approved for both undergraduate and graduate students. But, this particular loan is mainly focused towards graduate students. Undergraduate students would be able to obtain a better loan package from the subsidized Stafford loan program. Thus, most of the undergraduate students seem to stay away from unsubsidized Stafford loan.
Interest rate charges
For graduate students, the interest rate charged on the unsubsidized Stafford loan seem to be slightly on the higher end when compared to the interest rate charged on the subsidized Stafford loan program. But, this is quite normal. The main difference between a subsidized and unsubsidized Stafford loan lies in the interest rate factor that would be charged during the period of schooling.
In the case of subsidized Stafford loan, the interest rate charged on the loan when the borrower is still studying would be paid by the federal government directly and the borrower need not pay the interest rate charged during schooling and also until the repayment period gets initiated. But, with respect to unsubsidized Stafford loan, the interest rate charged during schooling would have to be paid back by the borrower. The borrower can choose to sum up the interest rate charged during that period and add it along with the principal loan amount.
Once, the monthly repayment period gets initiated after 6 months from the point of graduation, the borrower should repay the unsecured personal loans bad credit interest rate charged on the loan and also the interest rate factor charged during schooling. This is the only main difference between the two types of Stafford loans.
Loan amount approved under unsubsidized Stafford loan
Loan amount offered under any federal student loan would be based on the education fee charged to the borrower. Unsubsidized Stafford loans are no different from this either. But, when compared to a subsidized Stafford loan, the amount of money one would be able to obtain from an unsubsidized Stafford loan would be lesser.
Similar to that of a subsidized Stafford loan program, the terms associated with an unsubsidized Stafford loan are flexible. Deferment period can be applied by unsubsidized Stafford loan borrowers too. Apart from this, borrowers can even go for student loan consolidation, loan forgiveness programs etc. Unsubsidized Stafford loans would be eligible for all the benefits which would be offered to most of the federal student loans offered in the market. Graduate students would not be able to get a better loan package than unsubsidized Stafford loan.