There are such things as community-based student loans, which many is probably not aware of. Basically, some locations have groups which take donations to lend students cash, a lot like crowd funding.
Community-based student loans, another instance of crowd sourcing
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 college, albeit without a ton of specifics. However, the MarketWatch article Daily Finance quoted did have a few more details.
It's not dissimilar to the more recent phenomenon of "crowd funding" or "crowd sourcing," in that donors are solicited for funds. They throw a certain amount into a communal pot, from which loans are made.
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 new one.
However, just like crowd funded personal loans online websites such as Lending Club or Prosper, those loans do have to be repaid with interest.
Between federal and private
Daily Finance, Bankrate and MarketWatch all made it clear that community-based school loans, on the subject of cost, are somewhere between federal school loans and private school 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 Consumer Financial Protection Bureau complaints made about student loans.
Dependent upon the community-based student loan organization, interest can be anywhere from nothing to eight percent, according to MarketWatch. The catch is that the loans generally 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.
Paying for the rest
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 expenditures, according to Bankrate. The federal government has more cash than small organizations.
A "personal loan for educational purposes" could possibly 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 need to do the work to determine which program will work best for them. According to CBS, there are loan consolidation programs at credit unions that may be worth checking out.
Community-based student loans, another instance of crowd sourcing
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 college, albeit without a ton of specifics. However, the MarketWatch article Daily Finance quoted did have a few more details.
It's not dissimilar to the more recent phenomenon of "crowd funding" or "crowd sourcing," in that donors are solicited for funds. They throw a certain amount into a communal pot, from which loans are made.
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 new one.
However, just like crowd funded personal loans online websites such as Lending Club or Prosper, those loans do have to be repaid with interest.
Between federal and private
Daily Finance, Bankrate and MarketWatch all made it clear that community-based school loans, on the subject of cost, are somewhere between federal school loans and private school 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 Consumer Financial Protection Bureau complaints made about student loans.
Dependent upon the community-based student loan organization, interest can be anywhere from nothing to eight percent, according to MarketWatch. The catch is that the loans generally 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.
Paying for the rest
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 expenditures, according to Bankrate. The federal government has more cash than small organizations.
A "personal loan for educational purposes" could possibly 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 need to do the work to determine which program will work best for them. According to CBS, there are loan consolidation programs at credit unions that may be worth checking out.
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