Federal Loan For Students Studying Abroad and Their Repayment Options

Why Federal loan is the best for students?

Huge student loans can be very taxing in later years. A major chunk of a student’s first salary goes towards clearing off loans. Left with almost nothing, they find it very difficult to make ends meet. To overcome the crisis students often go for re-borrowing and thus walk into a vicious debt cycle. Extricating oneself from the trap is never easy, and more often than not it culminates in a tough legal wrangle.

If you are seeking student’s loan, federal loan for students studying abroad can be any day your best bet. Unlike private loans, federal loans are designed to facilitate repayment. Federal loans provide more options to clear off the loan. Some such popular student loans are Stafford loans, Perkins loans, and Grad Plus loans. With Grad Plus and Staffords loans, you get out of the red mark after 120 equal monthly payments spread over ten years. If you still cannot afford to repay, you can go for the graduated plan. This plan allows you to make less monthly payments for the first few years and higher payments for the rest of the ten-year span.

Federal loans haul you up only you after you go past your due for months. That is never the rule with private loans. Miss out on one payment, and bang you fall into the default category. You become the target of a collectors abusive collection practices.


The extended repayment plans in Federal loans can be very beneficial if you owe at least $30,000 in debts. With this plan you can spread out your monthly payments for as far as 25 years. Though it comes at a greater cost it provides you lot of relief in terms of lower monthly payments. The Federal Direct Loan program enables you make you break your payments from to 12 to 30 years, depending on the outstanding.


Income-based repayment plan, help those whose debts exceed their annual income. This program can reduce your payments to as low as zero. In this program, any remaining debt after 25 years is forgiven. In between, if your salary leaps, your payments are calculated as per the the standard plan.


You can defer federal-loan repayments for up to three years. However to avail this you need to be unemployed, or are facing economic hardship, or are on active duty in the military. In case of sudden emergency, you can suspend payments from up to three 12-month periods.

Given the benefits, Federal loans should always be your first and last preference.

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1 Comment on "Federal Loan For Students Studying Abroad and Their Repayment Options"

  1. Tips On Getting A Loan | July 12, 2013 at 3:58 pm | Reply

    Greetings! Very useful advice in this particular article!
    It is the little changes that will make the biggest changes.
    Thanks for sharing!

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