Both loans are available to undergraduate students, but the key difference is that direct subsidized loans are awarded based on need — and do not accrue interest while the student is in school or when loans are deferred after graduation.
Thereof, are education loans interest-free?
– No, education loan is not interest-free in India. However, student loan without interest is a possibility in India with scholarships and subsidies. You can negate the effect of interest on your education loan by availing 0% interest scholarships or subsidies with Government subsidy schemes.
Keeping this in consideration, should I pay off unsubsidized or subsidized loans first?
If you have a mix of both unsubsidized loans and subsidized loans, you’ll want to focus on paying off the unsubsidized loans with the highest interest rates first, and then the subsidized loans with high-interest rates next. Once these are paid off, move on to unsubsidized loans with lower interest rates.
What are the 4 types of student loans?
There are four types of federal student loans available:
- Direct subsidized loans.
- Direct unsubsidized loans.
- Direct PLUS loans.
- Direct consolidation loans.
What’s the difference between a subsidized and unsubsidized loan?
Subsidized Loans do not accrue interest while you are in school at least half-time or during deferment periods. … Unsubsidized Loans are loans for both undergraduate and graduate students that are not based on financial need.
Which student loans are interest free?
Subsidized Loans: No Interest Until After Graduation
There are two types of federal Direct loans available to undergraduate students: subsidized and unsubsidized. Subsidized loans are available to undergraduates who demonstrate financial need.