Interest and Loans: Other Types of Loans
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Student Loans
As the name implies, student loans are forms of financial aid meant for children who are still pursuing their studies, usually those in college, and usually from the government. They are considered different from scholarships and grants since they must eventually be paid back. Since they are meant for students, however, the loans are burdened with lower interest rates.
Depending on the country and geographic location, there are several factors that define eligibility and terms for a student loan. Some loans are dependent on the income of a student's parents while some do not, i.e., everyone is eligible to apply for and receive the loan.
For example, in the United States, subsidized Federal student loans are for students with a low family income; the interest payments for these loans are shouldered by the government (interest-free) while the student is still studying. On the other hand, unsubsidized federal student loans let the interest payments accumulate during the student's stay in college and the government does not pay for them. The student is also allowed to pay back the loan even while studying. Both these loans allow students a grace period of 6 months after graduation before requiring them to pay back what they owe. Other types require loans to be paid back immediately.
Credit reports of a student's parent/s may also be looked into for eligibility. In other cases, loans are granted directly to students.
Holiday Loans
Holiday loans are for people who wish to go on a vacation (hence, holiday) but don't have access to enough cash for such expenses. They are ideal especially if one doesn't want to wait long to save up enough money for a trip he/she wants to go on soon; sometimes money is a great hindrance to accomplishing goals and loans such as these let people worry less about them. Of course, this also means the standard "cost for gaining access to money one does not have upfront" will also be applied.
Holiday loans usually come in two flavors. Secured loans, which need to be secured against a collateral such as your property. This guarantees the lender of the loan that the borrower will have to pay back the loan according to the agreed terms; otherwise he/she will lose the property he/she had guaranteed. Unsecured loans are the opposite; borrowers need not risk any property, but he/she will have to face relatively higher interest rates and higher repayments.
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