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Definition: Plus Loan
PLUS stands for parent loan for undergraduate students. Plus Loan is a low cost education loan offered to parents for students. The current rate of interest rate is 7.9%. The interest is of fixed rate of interest over the period ranging from day of disimbursement of the amount to the last date of repayment.
The students are eligible for the full expenses incurred minus any financial aid available to the student. The minimum eligibility criteria are that the parent has to pass through the credit history check and child has to enroll for at least half the time. The repayment will start after six months of their completion of their education.
When ones apply for direct loan then they can more than their expenses if your debt to income ratio is low. But, Lenders always looks the adverse credit history. The direct plus loan also includes the living, Transportation and studying abroad expenses. The increased lending sue to the inflation of the various expense incurred during the child expenses.
The Liability for repayment of loan is on the parents of child. Now, If the Parents are struggling financially, then they can also use option of refinancing to max of 25 years. Best move for any debt repayment is to pay the debt as soon as possible because nonpayment will have an adverse impact on the credit score of an individual. This will impact in the financing of the future plans such as buying of house, buying of cars etc.