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.
Government compared to. Personal Funds
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 money: Provided and guaranteed by the federal government
- Private financing: Provided via private sources, such as banks, credit unions, try this site 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.
Individual Student education 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 credit. Additionally, some lenders provide a “release clause” to the co-signer after a predetermined number of on-time payments have been made.
Federal Student loans
Federal student education loans is finance that will be sourced because of the bodies. Generally, federal student loans is actually shorter strict to their recognition criteria. Federal college loans have fixed interest rates that will be lay from the Congress and put on the period of the borrowed funds. Particular federal fund are sponsored, which means that government entities pays the eye once the debtor is at school otherwise below deferment, when you’re unsubsidized loans require that the notice be distributed as soon while the mortgage try sourced. Government established loans are also really the only form of finance one to bring a variety of fees solutions.
Great Lakes try neither a national nor a private education loan organization. The business brings supervision and you may management so you can each other government student loans and personal college loans. High Ponds was initially created in 1967 during the Wisconsin. They work with more than half dozen thousand universities and partner along with one thousand lenders. Great Ponds will not originate any funds of one’s own. Alternatively, Great Ponds acts as brand new intermediary and guarantor anywhere between bank and borrower, currently becoming one of the largest student loan servicers.
A few Whenever choosing 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.