what is unsubsidized loan

An unsubsidized loan is a type of federal student loan available to both undergraduate and graduate students. Unlike subsidized loans, unsubsidized loans are not based on financial need. With an unsubsidized loan, the borrower is responsible for the interest from the moment the loan amount is disbursed to the school. This means that the interest accumulates and compounds on top of the original loan balance, and the borrower is responsible for repaying both the original amount borrowed and the accrued interest. Unsubsidized loans offer a wider range of students the opportunity to borrow money for their education, as they do not have the requirement of financial need. Its important to note that while unsubsidized loans are not the worst loans in terms of cost and interest rates, borrowers should be mindful of the amount they borrow and the eventual repayment amount.