Benefits Of Graduate Plus Loans

Benefits Of Graduate Plus Loans

Benefits Of Graduate Plus Loans - Private Student LoansThere are some key characteristics of grad plus loans that must be known to an aspiring student. First of all, grad plus loan is not a need based loan and thus, financial condition or income level of family is not taken into consideration.

Credit check is the only criteria used for awarding these loans. In no case, a person applying for the grad plus loan should have an adverse credit.This means there must not be any delinquency on any type of debt more than 90 days late.

If credit report of a person shows any type of discharge, repossession, foreclosure, wage garnishment, Title IV debt or tax lien in the preceding five years from the date of credit report, a person becomes ineligible to get the loan amount.

However, unlike private student loans, no credit scores or FICO scores are used for determining the eligibility. In some cases, credit report does not show severe issues and grad plus loans may be offered to the student. However, in such cases, a co-signer with good credit report is a necessary pre-condition that needs to be fulfilled.

Loan amount is arrived at on the basis of cost of attendance and actual requirements of student. If any other loan is taken, it is deducted from the grad plus loan amount. Interest rate applied on loan is fixed and is currently 7.9%.

It has been observed that people are confused about the manner in which loan amount is disbursed on grad plus loans. Lender, which is the Direct Loan Servicing, sends the loan amount to the school in which a student wishes to study or is studying. In some cases, disbursement checks are first endorsed by the borrower and then, sent to the school.

Grad plus loan amount is generally disbursed through installments, minimum number being two. In no case, amount of any installment can be greater than the half of loan amount sanctioned. Various types of expenses that are met first by the loan amount are tuition fee, room charges, board expenses, other school charges etc.

If any amount in the sanctioned limit remains, same is given to the student as cash or check. However, if the student wishes, he or she can get the remaining loan amount transferred to the school account. This amount is always used for expenses related to education.

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