If you have explored the qualifications for financial aid and it seems a student loan is your best option, you may find there are numerous choices available. Learn more about the types of loans available and how they work to determine which type of loan is the best option for you. Keep reading to see if Great Lakes student loans are your best option.
Federal against. Individual Finance
The U.S. Department of Education (DOE) recommends accepting free money first (scholarships and grants), then earned money (work-study), then borrowed money (federal student loans). If you have reached the point in your postsecondary journey when you are ready to explore loans, you may run into questions about federal and private loans.
- Government loans: Provided and guaranteed by the federal government
- Private finance: Provided via private sources, such as banks, credit unions, and states
The basic difference between federal student loans and private loans is how they are sourced. The government provides federal student loans, while financial institutions like banks or credit unions source private student loans. However, there are other key differences as well.
Private College loans
For those who pursue college financing via private lenders, the procedure is relatively simple and can often accelerate the loan process. A bank, credit union, or online lender will provide a private student loan to qualified applicants.
There are a number of variables to consider when using a private lender to source a student loan. Borrowers need to be aware of associated fees, terms for repayment, interest rates, and possible options for pausing payments in instances of financial hardship.
A co-signer, such as a parent, may be needed to secure a private student loan if the borrower has not yet established credit. This can actually be a benefit to the primary borrower since a co-signer with good credit may be able to secure a better interest rate. Also, it ount than a federal loan, especially if they have excellent online payday loans Mississippi no credit check credit. Additionally, some lenders provide a “release clause” to the co-signer after a predetermined number of on-time payments have been made.
Government College loans
Government college loans was loans that will be acquired by regulators. Typically, federal college loans was smaller strict on their recognition conditions. Federal student loans also have repaired interest rates that are set from the Congress and place towards the period of the loan. Some federal fund are sponsored, meaning that government entities pays the eye as the borrower is at school otherwise lower than deferment, when you are unsubsidized money wanted your attract be paid as soon given that mortgage try sourced. Federal depending loans are also the sole particular fund you to definitely provide a wide range of installment choices.
High Ponds was neither a federal nor an exclusive student loan company. The organization will bring supervision and you can management so you can one another federal student education loans and personal figuratively speaking. High Ponds was created in 1967 during the Wisconsin. They work along with six thousand universities and you can partner with over one thousand lenders. Higher Lakes does not originate any finance of one’s own. As an alternative, Higher Lakes will act as the fresh intermediary and you will guarantor ranging from lender and you may borrower, already becoming one of the largest education loan servicers.
Factors to consider When selecting a national Student loan
After completing your Free Application for Federal Student Aid (FAFSA), you will receive an award letter stating which types of student loans you have qualified for. It is highly advised that you have a sound idea of exactly how much you will need to borrow to fund your college experience so you can avoid over-borrowing when taking out your student loans.
