Do Student Loans Have to Be Certified?

You will most likely need to apply for a student loan (or several) if you’re planning to attend college. Keep in mind that you will need money for more than just tuition, too. Students also need textbooks, supplies and often housing – the costs really add up. Phoenix Banking Rates provides comparisons of low student loan interest rates that are currently available so you can find a student loan rate that’s affordable.

Though many common forms of student loans are “certified,” do not let the term “non-certified” scare you away from exploring more loan options. Non-certified student loans have many benefits that you should consider. Phoenix Banking Rates explains:

Certified

A certified student loan is paid directly from your loan account to your school to cover the balance of your bills. Sometimes, the school will even automatically deduct however much is needed every semester. Most certified student loans are federal loans. Aside from the simplicity of processing these student loans, the interest rates are also usually lower.

Non-certified

Unlike federal student loans, non-certified loans come in the form of private student loans. These types of loans are commonly referred to as “alternative college loan financing.” They are funded by private lenders, such as banks. Private student loans are considered to be an option for students and parents who have exhausted all of their efforts in receiving federal assistance. The loans are paid directly to you so you have more flexibility in how you will spend the money.


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