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 versus. Individual Financing
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.
- Federal loans: Provided and guaranteed by the federal government
- Private money: 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 direct lenders for bad credit loans in New York student loans, while financial institutions like banks or credit unions source private student loans. However, there are other key differences as well.
Personal Student 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.
Government Student education loans
Government student loans are financing that are sourced from the bodies. Generally speaking, federal student loans is smaller stringent on the recognition requirements. Federal student education loans supply fixed interest levels which can be lay by the Congress and place into the length of the mortgage. Some federal money try paid, and therefore the us government pays the eye as the borrower try at school otherwise not as much as deferment, when you are unsubsidized financing need that desire be distributed as soon once the mortgage are acquired. Federal depending money are also truly the only type of financing you to definitely render a variety of cost alternatives.
Higher Ponds try neither a national nor a private student loan organization. The company provides oversight and you may management in order to both government figuratively speaking and private student loans. Great Lakes was initially established in 1967 from inside the Wisconsin. It works with more than half a dozen thousand colleges and spouse with well over a lot of loan providers. Higher Lakes cannot originate any financing of one’s own. Alternatively, High Lakes will act as this new mediator and you may guarantor between bank and you may borrower, currently acting as one of the greatest education loan servicers.
Factors to consider When selecting a federal Education 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.