Credit Union for Loan Consolidation Programs

There are specific things like community-based school loans, which many is probably not conscious of. Essentially, some areas have groups which take donations to give students money, a lot like crowd funding.

A crowd-sourcing opportunity

Students who are going to college and need some cash to do it may be able to get a community-based student loan dependent upon the area they go, according to a Daily Finance article. These community associations are showing up all over the country, and MarketWatch has most of the specifics.

The donors get solicited for funds with "crowd sourcing," and the program is very comparable to that. Loans are given with the money people put into the communal pot.

MarketWatch pointed out that it is not even a 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.

Prosper is a crowd funded personal loans site. Just like those loans, these ones have interest and have to be paid back by the students.

Not quite private or public

Daily Finance, Bankrate and MarketWatch all made it clear that community-based school loans, when it comes to 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 Consumer Financial Protection Bureau complaints made about school 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 typically require a huge piece of collateral, such as a parents 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

According to Bankrate, community-based student loans may not be enough to pay for the total cost of college, but just enough to cover tuition and books. Many of these organizations just do not have the cash to lend the federal government or big banks do.

You may want to go to a credit union for their loan consolidation programs, and there are also programs similar to these ones that offer university funding, according to CBS. The terms are usually pretty good. Make sure parents and students are both doing the research to determine what is best.