Scholarship vs Loan: What's the Difference & How to Get One
Good higher education could be really costly. The higher the quality, the higher the fees. Because not everyone can afford to get the education they deserve, there are a lot of financial aids and programs to encourage aspiring students to really reach for their dreams. However, sometimes people can confuse different types of aid such as a scholarship and a loan. So, Educatly is going to do what it always does, and help you learn the difference between a scholarship and a loan and plan your study abroad future well.
What is a Scholarship?
Scholarships are types of financial aid that do not need to be repaid. They are usually awarded based on academic merit, athletic ability, artistic talent, or other criteria specified by the scholarship provider. Some scholarships are also available to students who demonstrate financial need.
Different organizations offer scholarships. It can be a university, the government, a business, a foundation, or even a charity. Some scholarships are awarded as checks to students, and others are more involved with the application process. Scholarships usually cover tuition fees, education expenses like books and computers and sometimes accommodation.
Some scholarships give you the aid right away, while others do it in instalments, yearly or semester based. It’s also worth mentioning that not every university in the world accepts scholarships, so students who get scholarships must be aware of their available options.
What is a Loan?
Loans, on the other hand, are a form of financial aid that must be repaid with interest. Loans can come from the government, banks, private lenders, or financial institutions. Students who take out loans should be mindful of the repayment terms and understand all the details before signing a loan agreement.
The interest rate on a loan is the percentage of the loan amount that you will pay in addition to the principal (the amount you borrow). The interest rate depends on the type of loan, the lender, and other factors. Loan repayment typically begins six months after you graduate or leave school; however, there are some types of loans with different repayment terms.
The Biggest Differences Between Scholarships and Loans
The biggest difference between scholarships and loans is that loans need to be repaid, with interest, while scholarships do not. Scholarships are typically need-based or merit-based, while loans are always based on your credit score. Meaning, any student can apply for a loan as long as they prove they can repay it, while scholarships are for advanced and exceptional students to be won.
So if you need money for school but don't think you'll be able to repay a loan, a scholarship may be the better option. Then the next step for you would be to study hard as scholarships are competitive and exclusive.
Finally, the application process for each type of aid is different. Scholarships usually require an essay or personal statement, while loans will require a detailed financial history and credit check. Be sure to choose well or allow yourself enough time to complete both applications thoroughly.
Do You Want a Scholarship? A Loan?
Educatly can help you find a suitable scholarship for you, or get the loan you want. For starters, there are a lot of scholarships available for Egyptian students to study abroad. For better opportunities, career advancements and a once-in-a-lifetime experience, students can study abroad now and pay close to nothing. It might feel like a lot of work, and sometimes it could be, but if you think about it, it really isn’t. You can read all about preparing for a scholarship, and start your journey
But that’s not all there is. If you’re a student who wants to study in the USA, you can apply for a loan through Educatly and MPower Financing this year. You can study for free now and pay later at one of 28 universities in the US and get your master’s in STEM or take an MBA. We will help you with your student visa, credit score, and even finding a job abroad after graduation. Your funding can be up to $100,000 which covers tuition fees, accommodation, and any expenses needed to study abroad. You can check your eligibility, explore your options, and fill out this form to set up a meeting and discuss your options.
The differences between a scholarship and a loan should be clear by now. With so many options available to you, you just need to research and follow your dream!