What Are Alternative Student Loans
When most people talk about student loans in general
, they're talking about the loans that come down to students through the federal government. Every year, the federal government gives millions of dollars to students who are in need of assistance to get through their schooling. The loan program offers fairly low interest loans, and it allows students lots of flexibility in paying them back. Plus, families with higher financial need can get subsidized loans, on which the government pays the interest until repayment starts. This can add up to a pretty big savings!
Although most students in the United States will qualify for federal student loans, more and more students also have to apply for
Alternative Student Loans. These are basically private loans through individual banks that have different programs. These loans are a lot like taking out unsecured personal loans. That is, they don't have any collateral, like a mortgage or a car loan does, and they're written to you personally rather than to the school.
With a federal student loan, the money goes directly to the school you've chosen to attend. After the semester has been paid for, you can either have the money put back against the balance of the loan or sent to you in a check. Many times students use this check to pay for books or living expenses while they're in school.
With Alternative
Student Loans the lender generally writes the loan check to you. You're then responsible for getting the money to your school on time and paying for the rest of your schooling needs out of the extra.
You can often get these private loans to cover the entire cost of your education less whatever loans and other aid you're getting. Sometimes you can also use a little extra to pay for your room and board, gas, and other basic living expenses while you're in college. Many students who are taking full course loads can't afford to work very much, so these loans are essential to their successful college career.
Keep in mind that these loans are private, so the rules vary from bank to bank. However, more often than not, they work a lot like federal student loans. That is, you don't have to make payments as long as you're a student, and they have fairly low interest rates. These options can be good for students who can't get grants and federal loans to cover their educations.
What Are Alternative Student Loans
By: flexjohn
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