If you’re in the market for student loans, you might be overwhelmed and wondering where you should start. The first step is to educate yourself about what types of loans are out there. Student loans are generally needed when financial aid runs out, or if you don’t qualify for financial aid. Compare each type and consider which loan will be best for you and your situation. There are two major categories: private student loans and federal loans.

Federal loans are provided by the government and there are a few different types that you may qualify for. You can get a federal loan directly from the government or from a bank or credit union. When you’re inquiring about these loans, refer to them as Federal Stafford Loans. It may be helpful to go directly to your bank and get some guidance as to which type is best for you. But you can research this yourself and most likely be able to determine which one best suits your needs. Remember, these federal loans are income based, so check your eligibility before you proceed.

Subsidized Federal Stafford Loans are subsidized by the government. This simply means that the government agrees to pay the interest while you are enrolled in school. They will also pay interest for you if you need to defer your payments later in life. This makes lending you money safer for the banks and credit unions. They know that they are going to make their money, allowing you to reap the benefits of lower interest rates, longer pay-off periods and government subsidy.

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