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Are You Eligible for a Government Loan?
There are a number of reasons why people need loans. These can range from financial emergencies to starting a new business. Just as there are many reasons people need loans, there are also many types of loans to be had.
Almost anyone who is a US citizen or permanent resident and 18 years of age or older is eligible for some sort of government loan. Various government agencies, from the U.S. Department of Agriculture to the U.S. Department of Education, provide different types of loans for many types of situations that can cause financial strain. The first step to take in getting a government loan is to determine which type of loan you will be eligible for.
Each type of loan has a specific purpose, ranging in aid after environmental disasters, to assisting individuals with further and advanced education. If must be remembered, however, that just because a person may be eligible for a loan, it does not mean a loan will be granted to them. But, as the requirements for government loans are usually more flexible than bank loans or loans from private institutions they tend to be easier to acquire.
What is assessed when applying for a government loan?
When applying for a government loan there are many things that go into approving a person for a loan. These things are things that are considered when applying for any loan whether it be a government loan or a loan from a private institution. The list of considerations assessed includes: credit history, annual income, and, obviously, the type of loan requested. Generally, in regards to government loans, a good credit history is not as critical as is when one is applying for a loan from a private bank or institution because the government is not as adversely affected by defaulted payments.
Why would a government loan be preferable to a loan from a private institution?
The eligibility requirements for a government loan are generally less stringent than those of private institutions. This is often the case because the government has the resources to provide for defaulted payments, while private institutions often need more security. Furthermore, a government loan is designed to aid their populations, while private loans are expecting to earn money from interest in subsequent years. Therefore, the interest rates of government loans are generally fixed and lower, while the interest on private loans may alter and increase throughout the years.