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What is a student loan?

Curious about student loan

What is a student loan?

A student loan is a type of loan that is designed to help students pay for college or other higher education expenses. The loan can cover tuition, books, and other schoolrelated expenses, and is typically offered at a lower interest rate than other types of loans.

Student loans can be offered by the federal government, as well as private lenders such as banks and credit unions. Federal student loans are typically the most affordable and offer more flexible repayment options, while private student loans can have higher interest rates and stricter repayment terms.

There are two main types of federal student loans: subsidized and unsubsidized. Subsidized loans are available to students who demonstrate financial need, and the government pays the interest on the loan while the student is in school. Unsubsidized loans are available to all students, but interest begins accruing as soon as the loan is disbursed.

Repayment of student loans typically begins after the student has graduated or left school, although there may be a grace period before payments are due. It's important to carefully consider the terms and conditions of any student loan before accepting it, and to have a plan in place for repaying the loan after graduation.

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