Education Loan

DEFINITION of 'Education Loan'

Money borrowed to finance education or school related expenses. Payments are often deferred while in school and for a six-month grace period after graduation. There are a variety of federal and private student loans available (see An Introduction to Student Loans and the FAFSA and College Loans: Private vs. Federal).

BREAKING DOWN 'Education Loan'

Your decision about which type of loan to get will affect not just its current interest rate, but your ability to consolidate your loan or have it forgiven down the road. It's generally best to start by trying to get a federal loan before exploring other options. For more, see 10 Tips for Managing Your Student Loan Debt.