There are such things as community-based student loans, which many may not be conscious of. Basically, some locations have groups which take donations to lend students money, a lot like crowd funding.
A crowd-sourcing opportunity
A recent Daily Finance article discussed a growing number of community associations springing up around the country, offering community-based student 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.
The donors get solicited for funds with "crowd sourcing," and the program is very comparable to that. Loans are given with the cash people put to the communal pot.
MarketWatch pointed out that it is not even a brand new idea since the Canton Student Loan Organization in Ohio has existed since 1922. The organization has given over 5,000 students more than $27 million in loans.
The loans are paid back with interest just like other crowd funded personal loans online websites such as Prosper.
What are the loans?
Daily Finance, Bankrate and MarketWatch all made it clear that community-based student loans, on the subject of cost, are somewhere between federal school loans and private student loans.
The cost of going to a community bank or credit union for a private loan is higher than going to Sallie Mae normally. Sallie Mae accounted for 46 percent of all CFPB complaints made about student loans.
Generally, federal Stafford loans have the best rates. Private loans range depending on lender, but could be as high as 16 percent. Community-based student loans can range from zero-percent interest, from some organizations and generally top out, according to MarketWatch, at 8 percent from most institutions. However, they also usually come with harsher terms, as many have shorter repayment periods and some require collateral up to and such as the parent's home.
Spending money on the rest
According to Bankrate, community-based student loans is probably not enough to cover the total cost of college, but just enough to cover tuition and books. Many of these organizations just don't have the cash to lend the federal government or big banks do.
A "personal loan for educational purposes" could be provided by credit unions in the same way, and the terms would be better than if you were to go to a private lender. Students and parents have to do the work to figure out which program will work best for them. According to CBS, there are loan consolidation programs at credit unions that could be worth checking out.
A crowd-sourcing opportunity
A recent Daily Finance article discussed a growing number of community associations springing up around the country, offering community-based student 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.
The donors get solicited for funds with "crowd sourcing," and the program is very comparable to that. Loans are given with the cash people put to the communal pot.
MarketWatch pointed out that it is not even a brand new idea since the Canton Student Loan Organization in Ohio has existed since 1922. The organization has given over 5,000 students more than $27 million in loans.
The loans are paid back with interest just like other crowd funded personal loans online websites such as Prosper.
What are the loans?
Daily Finance, Bankrate and MarketWatch all made it clear that community-based student loans, on the subject of cost, are somewhere between federal school loans and private student loans.
The cost of going to a community bank or credit union for a private loan is higher than going to Sallie Mae normally. Sallie Mae accounted for 46 percent of all CFPB complaints made about student loans.
Generally, federal Stafford loans have the best rates. Private loans range depending on lender, but could be as high as 16 percent. Community-based student loans can range from zero-percent interest, from some organizations and generally top out, according to MarketWatch, at 8 percent from most institutions. However, they also usually come with harsher terms, as many have shorter repayment periods and some require collateral up to and such as the parent's home.
Spending money on the rest
According to Bankrate, community-based student loans is probably not enough to cover the total cost of college, but just enough to cover tuition and books. Many of these organizations just don't have the cash to lend the federal government or big banks do.
A "personal loan for educational purposes" could be provided by credit unions in the same way, and the terms would be better than if you were to go to a private lender. Students and parents have to do the work to figure out which program will work best for them. According to CBS, there are loan consolidation programs at credit unions that could be worth checking out.
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