A student loan is an unsecured form of a loan, typically offered to college students to assist them in paying for college and related expenses, including tuition, textbooks and other supplies, and living expenses while attending school. Student loans are commonly available through banks, credit unions, or online lending sources such as PayDay lending. The interest rates on student loans are usually based on need, or on the students’ credit score at the time of application. Most student loans require borrowers to begin repayment after graduation. In most cases, repayment is done on a regular schedule based on the borrower’s earnings and income. Learn more -click for more info
The lender that holds the mortgage to your house is the lender that most commonly provides student loans. When you apply for a Federal student loan, the lender will send you a federal student loan application. The lender will then assess your financial status and will determine if you are qualified for the loan. If your FAFSA is approved, your bank or lender will forward your application to the Federal government for review. The government review process involves much more paperwork than does the private lending review process, but the outcome can be beneficial to you if you are unable to repay the student loans.
In general, the interest rates for both types of borrowing is similar. The federal loan process has better terms for students and families and allow for a more flexible repayment plan and reduced interest rates. Private student loans, however, have better interest rates and payment terms. Private student loans, in many cases, have better interest rates and shorter repayment periods. If you decide to take out private student loans, your repayment will likely start sooner than with either the government or the private sector.