Student loans are an easy way to pay a portion of your bills while you are in college. They can be combined with other forms of financial aid such as grants and scholarships, and do not need to be repaid until after you graduate. However, all student loans are not created equal. Provided here is a quick guide to choosing student loans.

Stafford Loans
Stafford loans are a popular form of student loans. Guaranteed by the federal government, Stafford loans do not require a credit check and are therefore available even to those with questionable credit. Interest rates are low compared to other types of loans. Stafford loan payments are automatically deferred until six months after you leave school or drop below half time enrollment. The amount that you can borrow depends on whether you are a dependent or independent student and how far along you are in college. They are available in both subsidized and unsubsidized versions.

On subsidized Stafford loans, the government pays the interest while you are in school. This can result in a significant long-term savings. On unsubsidized Stafford loans, you have a choice. You can make interest payments while in school, or you can have the interest capitalized into the loan balance. There are caps on the dollar amount that can be subsidized, so most students carry a combination of subsidized and unsubsidized loans.

Perkins Loans
These loans are similar to Stafford loans, but designed for students with exceptional financial need. There are no fees and the interest rate is just five percent. The Perkins loans also offer a longer grace period before repayment.

Federal PLUS Loans for Parents and Graduate Students
If you are the parent of a college student, or attending graduate school, you can take out a low interest loan through this federal program. The interest may be deductible, and there are several payment options from which to choose. However, these loans may not be available to you if your credit is poor.

Graduate student PLUS loans will receive automatic deferment while you are enrolled in school. You may also elect to have the interest capitalized into the total loan amount.

Private Loans
If you need more money for school after you have exhausted your federal loan eligibility, you may qualify for private student loans. The terms of these loans are generally less favorable than those of federal loans, but better than traditional unsecured loans. However, your individual loan terms will vary according to your credit history.

The Bottom Line
Student loans can help make up the difference between free financial aid and the cost of attending college. The terms are very favorable compared to other unsecured loans. Be careful not to over-borrow, however. The ease of obtaining student loans makes it easy to rack up significant debt without realizing what happened. When used cautiously, however, student loans are an excellent choice for those who need extra help with college costs.