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 vs. 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 money: Provided and guaranteed by the federal government
- Private funds: 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.
Individual 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 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 education loans
Federal college loans is fund that are sourced by bodies. Generally, government student education loans was faster stringent on their recognition conditions. Government college loans have repaired rates of interest that will be lay by Congress and set to your amount of the mortgage. Specific federal money is actually paid, which means that the government pays the attention because debtor is actually at school or under deferment, when you’re unsubsidized financing require your desire be distributed right once the financing is https://getbadcreditloan.com/payday-loans-sd/ actually sourced. Government based loans are also really the only brand of finance that offer a variety of repayment solutions.
Great Ponds is neither a national nor an exclusive student loan providers. The company brings supervision and you will administration to help you one another federal college loans and personal figuratively speaking. High Ponds was initially established in 1967 for the Wisconsin. It works with well over half a dozen thousand colleges and you may lover along with one thousand loan providers. Great Ponds doesn’t originate one finance of one’s own. As an alternative, Great Lakes will act as the fresh mediator and you can guarantor between lender and you may debtor, currently acting as one of the biggest education loan servicers.
You should make sure When deciding on a national 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.