Consumer debt consists of personal debts that are owed as a result of purchasing goods that are used for individual or household consumption. Credit card debt, student loans, auto loans, mortgages, and payday loans are all examples of consumer debt.
What type of debt is a student loan?
There are three types of student loans: federal loans, private loans and refinance loans once you leave school. Federal loans are provided by the government, while banks, credit unions and states make private loans and refinance loans. Federal loans are more flexible overall.
Is a federal student loan a consumer loan?
Federal student loans are backed by the federal government.
It is important to understand how student loans are guaranteed, which is different from other kinds of consumer debt. Federal student loans are backed by the federal government and processed and disbursed by the U.S. Department of Education.
What is considered a consumer loan?
A consumer loan is any type of loan where a person borrows money from a lender. There are various types of consumer loans that are both secured and unsecured. Each loan comes with different terms and interest rates, and they’re usually used for a specific purpose.
What percentage of consumer debt is student loans?
Individual Debt Reaches Levels Last Attained in 2010
| Change in Average Balance by Debt Type | ||
|---|---|---|
| 2019 | Change | |
| Student loan | $35,620 | 8.90% |
| Auto loan | $19,231 | 2.50% |
| Mortgage | $203,296 | 2.40% |
What are the 4 types of student loans?
There are four types of federal student loans available:
- Direct subsidized loans.
- Direct unsubsidized loans.
- Direct PLUS loans.
- Direct consolidation loans.
What is the easiest government loan to get?
Stafford Loans: These are easy to qualify for, and you might receive interest subsidies. PLUS Loans: Parents can borrow substantial amounts, but that means parents will have to repay. Perkins Loans: These loans were a popular choice for students based on attractive features but are no longer offered.
What is the most common student loan?
A Quick Guide to the 4 Most Common Federal Student Loans
- Perkins Loan — 5 percent fixed interest rate. …
- Direct Subsidized Loan — 4.66 percent interest. …
- Direct Unsubsidized Loan — 4.66 percent for undergrads, 6.21 percent for grads students or professionals. …
- Direct PLUS loan — 7.21 percent.
How do I know if my student loan is federal or private?
The best way of determining whether loans are federal or private is to log in to the National Student Loan Database, at www.nslds.ed.gov. The Department of Ed. makes it clear that only individual borrowers are allowed to log into this site, not third party companies or financial advisors.
What is the most common consumer loan?
The most popular consumer installment loan products are mortgages, student loans, auto loans and personal loans. In general, lenders use consumer’s credit score and debt to income ratio to determine the interest rate and loan amount for which they are qualified.