There are such things as community-based school loans, which many may not be conscious of. Essentially, some locations have groups which take donations to lend students cash, a lot like crowd funding.
A crowd-sourcing opportunity
A recent Daily Finance article discussed a growing number of community organizations springing up around the country, offering community-based school loans that are being made to students heading off to university, albeit without a lot of specifics. However, the MarketWatch article Daily Finance quoted did have a few more details.
It is just like the recent "crowd sourcing" that has been going on. The funds are all put into one big pot and loans are made from it.
The Canton Student Loan Organization of Canton, Ohio has lent $27 million to over 5,000 students since 1922 when it was first started, meaning the idea is not a brand new one.
The loans are repaid with interest just like other crowd funded personal loans sites such as Prosper.
Between federal and private
Daily Finance, Bankrate and MarketWatch all made it clear that community-based student loans, on the subject of cost, are someplace between federal school loans and private school loans.
The Consumer Financial Protection Bureau got 46 percent of its student loan grievances from Sallie Mae, which is pretty e expensive for private loans. You can also get private loans from a credit union or community bank, though they are typically cheaper.
Depending on the community-based student loan organization, interest could be anywhere from nothing to eight percent, according to MarketWatch. The catch is that the loans typically require a massive piece of collateral, such as a parent's home, and have much harsher terms. Federal Stafford loans have the best rates and Private loan rates could be as high as 16 percent.
Just for tuition and books
The idea of the community-based school loans is to help students cover tuition and books. They are not enough to help pay for all other university expenses, according to Bankrate. The federal government has a lot more money than small organizations.
Credit unions likewise might be able to arrange some funding for university, though it might come in the form of a "personal loan for educational purposes." However, they also might lend at better terms than a private lender. A number of credit unions are also, according to CBS, offering student loan consolidation programs. Each student and/or their parents will have to do their homework on community loan organizations and credit unions in their area to get more information.
A crowd-sourcing opportunity
A recent Daily Finance article discussed a growing number of community organizations springing up around the country, offering community-based school loans that are being made to students heading off to university, albeit without a lot of specifics. However, the MarketWatch article Daily Finance quoted did have a few more details.
It is just like the recent "crowd sourcing" that has been going on. The funds are all put into one big pot and loans are made from it.
The Canton Student Loan Organization of Canton, Ohio has lent $27 million to over 5,000 students since 1922 when it was first started, meaning the idea is not a brand new one.
The loans are repaid with interest just like other crowd funded personal loans sites such as Prosper.
Between federal and private
Daily Finance, Bankrate and MarketWatch all made it clear that community-based student loans, on the subject of cost, are someplace between federal school loans and private school loans.
The Consumer Financial Protection Bureau got 46 percent of its student loan grievances from Sallie Mae, which is pretty e expensive for private loans. You can also get private loans from a credit union or community bank, though they are typically cheaper.
Depending on the community-based student loan organization, interest could be anywhere from nothing to eight percent, according to MarketWatch. The catch is that the loans typically require a massive piece of collateral, such as a parent's home, and have much harsher terms. Federal Stafford loans have the best rates and Private loan rates could be as high as 16 percent.
Just for tuition and books
The idea of the community-based school loans is to help students cover tuition and books. They are not enough to help pay for all other university expenses, according to Bankrate. The federal government has a lot more money than small organizations.
Credit unions likewise might be able to arrange some funding for university, though it might come in the form of a "personal loan for educational purposes." However, they also might lend at better terms than a private lender. A number of credit unions are also, according to CBS, offering student loan consolidation programs. Each student and/or their parents will have to do their homework on community loan organizations and credit unions in their area to get more information.
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