Perkins Loan: What Makes This Student Loan So Desirable?

Student loans can make all the difference between being able to take that degree or graduate course you want to do and pursue your dream career, and not being able to afford to do it.

Student loans are different from your usual credit products because they have a lower rate of interest, are easier to qualify for if your credit rating isn't great, and can be deferred under certain circumstances without harming your credit rating (though the full amount does still always have to be paid back).

There are several different types of financial aid and loans that students and their families (if they are dependents) are able to apply for, including Perkins Loans, PLUS Loans and Stafford Loans. The first step to gaining financial aid is to complete the Free Application for Federal Student Aid form (FAFSA), which you can do online. This is used by the government and by schools to determine how much aid you are entitled to, and what kind of loans you can get depend on the results of the assessment of this form.

The most desirable kind of student loan, if you are eligible to get it, is the Perkins Loan. This is because the Perkins Loan has an incredibly low rate of interest. It can be awarded to full and part time students, and graduate and undergraduate students can both apply.

Other than being in higher education, there are some other criteria you have to meet to be eligible for a Perkins Loan. Firstly, you have to have a status such as permanent residency, or be a US citizen or national. Secondly, and this is the part that can be difficult for a lot of people, you have to demonstrate that compared with other students, you have a significant financial need for the Perkins Loan. Because of the desirability and demand for Perkins Loans, you should expect to have to apply early if this is the loan you want or need.

There is no credit check for the Perkins Loan, so it is great if you don't have much of a credit history or the credit history you do have is less than perfect. The interest rate is currently fixed at 5%, but the interest is subsidized while you are still a student. The repayment options are incredible flexible, and you have options such as consolidation and early repayment.

The money for Perkins Loans is distributed by schools but comes from the government. The maximum amount for an undergrad is $20,000 over their full undergraduate career, with an annual maximum of $4000. This goes up to $6000 annually and $40,000 for the full student lifetime for post graduate students. These are maximums in the truest sense though - you may not be granted the full amount. The amount you get if you win a Perkins Loan will be determined by your school, who need to control how they distribute the funds available to them to the students who need them most. This is largely determined by the FAFSA form.