Get the Best Deal on Your Student Loans

by: Nataliya Yakushev

Providing money for college is a big business. Every year, lending institutions issue over $47 billion in college student loans. If you're scrambling for money for college, take heart — you can find loans for college, provided you're willing to do a little digging.

Getting college student loans isn't that difficult. The real trick with college financing is finding the combination of public and private college loans that leaves you in the best financial position after you graduate.

College financing and your credit score

If you have a truly spectacular credit score, you might consider private college student loans. This type of college loan is sourced strictly from a private lender, with no guarantees or funding from the federal government. With an excellent credit history, you may be able to negotiate loan rates that compare favorably with government-funded student loans.

How does your credit score measure up? Be sure to check your credit report and score. If your credit score is 800 or above, you may be able to get money for college strictly through private sources.

Caution: Private college student loans are like any other type of consumer debt. The lender examines your credit history and offers you a loan package based on your credit score. For students with blank credit reports, a private college student loan may be out of reach.

College financing with no credit history

Fortunately, many non-credit-based sources of college financing are out there. Stafford college loans are available for students who need money for college but don't have an established credit history.

Stafford college loans are offered in two varieties: subsidized and unsubsidized.

Subsidized Stafford loans should be your preferred college loan. The federal government pays the interest on the loan while you're in school. Stafford loans will save you the most money in the repayment period. However, subsidized Stafford college loans are awarded based on financial need.

Unsubsidized Stafford loans are available to any college student. The federal government doesn't pay the interest on these college student loans. Instead, you have two options: pay the interest as it accrues, or add the interest to the principle. If you can pay the interest while you're in school, the unsubsidized Stafford loan can take care of much of your college financing need. If you can't pay the interest, the unsubsidized loans will cost you more during the repayment period.

Perkins college loans are available directly from the schools and are awarded on a first-come, first-served basis. Like subsidized Stafford loans, Perkins loans are awarded based on financial need.

Depending on where you go to college, you may be able to take advantage of state-based college student loans. These loans are issued by private lenders but are backed up with federal and state funds, so you can qualify for them with a limited or adverse credit history.