Both can be used for tuition and living expenses, but some differences exist. ![]() How Do the Two Work Together?Ĭoncerning the financing of college education, the two main types of loans are private and federal. The act of refinancing is a good way for individuals to wipe out their student debt because, with a private lender, the debt will no longer be associated with federal loans. Visit the Federal Student Aid page for more details. National mergers are handled directly by the Ministry of Education. The main focus of federal consolidation is to analyze your federal loans for the desired federal programs, which MyGreatLakes does not offer directly. It could be a good idea to compare federal consolidation to private refinancing as an alternative to analyzing complex financial terms. Often, it takes time for people to figure out the difference between refinancing and consolidating. Therefore, Great Lakes does not make loans but acts as a third party to manage and process loans made by government or private lenders. Federal loans come with special terms and conditions set by the government, while private lenders can form their terms for their loans. The federal government and private lenders make the loans they service. Great Lakes is a student loan servicer, not a lender. This type of loan often has lower interest rates and more extended repayment periods than private lenders, making it attractive for those needing capital who may not have access to private lending sources. ![]() It is typically used to help individuals and businesses purchase items or finance activities they otherwise would not be able to afford. What is Federal Lending?įederal lending is a type of loan that the government provides. As always, it is essential to thoroughly research any lender before making any financial commitments. Borrowers should be aware of the risks associated with private lenders, however, including a lack of oversight and potential scams. Private lenders typically offer flexible terms and lower interest rates and fees than traditional banks. Private lenders provide alternative financing for individuals who do not qualify for conventional loans or require funds quickly.
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