Credit

Loans

Financial loans are an example of installment credit. Loans are complex and their terms may seem confusing, but they can provide needed money at a time when you don’t have it. Many people use financial loans to pay for a car, house, education, or assistive technology.

Learn more about how loans work, when to consider one, questions to ask, and how to evaluate loan terms in this three-part blog series on understanding loans by Pennsylvania Assistive Technology Foundation.

Student Loans

College can be expensive and a student loan may seem like an attractive way to fund your degree. But, think carefully about where you want to go, what you want to study, and how much money you will need to borrow in order to attend school. The more money you borrow, the bigger a commitment you’re making to paying it back—and the more money you’ll ultimately pay in interest. Be sure to research all your options for funding your education, including scholarships, financial aid, grants, work-study, and resident assistant programs. 

If you decide you want to take out a student loan, and you have determined how much money you’re comfortable borrowing (and eventually paying back), you have options about which lending program to use. There are two major sources of student loans: federal and private. Learn more about the types of federal student loans.

Helpful Tip!

The Federal Pell Grant is a grant available to undergraduate students who display exceptional financial need and have not earned a bachelor’s, graduate, or professional degree. Learn more about Pell Grants and find out if you qualify.

Loans Must Be Taken Seriously

One missed payment can result in a delinquency, and multiple missed payments can result in a default. This will have a severe negative impact on your credit. Avoid these problems by researching your options for delaying your payments if you find yourself in a position where you can’t afford them for a period of time. And be aware, it is very difficult to get discharged from a student loan—in fact, they are one of the only types of loans that will not be discharged even if you file for bankruptcy! One exception: if you are totally and permanently disabled, you may qualify for a total and permanent disability (TPD) discharge of your federal student loans. With a TPD discharge, you will no longer be required to repay your loans. Learn more about total and permanent disability discharge.