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. Private Money
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 funds: Provided and guaranteed by the federal government
- Personal 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.
Personal Figuratively speaking
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 payday loans Virginia 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 Figuratively speaking
Government student education loans was loans that will be acquired from the government. Generally, government figuratively speaking was faster strict to their recognition criteria. Federal figuratively speaking have repaired rates of interest which might be lay by the Congress and put to your length of the borrowed funds. Some federal money are subsidized, which means that the federal government pays the attention because borrower was in school otherwise lower than deferment, when you’re unsubsidized finance wanted the attract be paid right as the financing was sourced. Federal centered funds are really the only form of money that render many repayment choices.
High Lakes is actually neither a federal neither a private education loan organization. The organization provides supervision and you can management so you’re able to each other federal student loans and personal figuratively speaking. Great Lakes was first established in 1967 into the Wisconsin. They work with well over half a dozen thousand schools and you can companion with well over one thousand loan providers. Great Lakes will not originate one funds of their own. Rather, High Ponds will act as the latest mediator and you may guarantor anywhere between lender and you will debtor, already acting as one of the biggest student loan servicers.
A few When 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.