Skip to main content
Español

What’s the Difference Between Government Grants and Loans?

Date: December 11, 2020

Are you looking to get help paying for your education? Does your non-profit organization need financial assistance to complete a community project? The government offers financial help, but you may not know what’s available and where to find it. 

There are two main types of help offered by the government: grants and loans. Use this quick guide from USAGov to explore the difference between the two and find out how to apply.

Grants

Government grants fund projects that will benefit parts of the population or the community. Grants provide money for projects that help improve the economy or the public. Understand key information about grants:

  • The federal government awards grants to state and local governments, universities, research labs, law enforcement, non-profit organizations, and businesses. 
  • People can't use grants for personal benefits. Organizations receive this funding and don’t have to repay it. 
  • To search or apply for grants, visit the federal government’s free, official website, Grants.gov. There you can check your eligibility, find tips for the application process, learn how to write a successful grant proposal and more.

 

Loans

Government loans are borrowed money for an individual as a personal benefit or assistance. These loans are for specific purposes like help with student financial aid, housing situations, or utility bills. Understand key information about loans:

  • Individuals can receive loans. You are required to pay back money, often with interest.
  • Sometimes loans are available to cover disaster or emergency relief. Examples include if a major hurricane affected your home or the coronavirus pandemic hurt your small business. 
  • Use GovLoans.gov to begin your search for government loan programs. Check your eligibility with the online pre-screening tool and read about each loan application process. 

No matter how you’re applying for financial aid, know that the federal government does not give “free money” to individuals. If you receive a message saying you qualify for a "free" grant or money, it is likely a scam. 

Want more information about government grants and loans? Learn more at USA.gov.

You might also like …

  • USAGov’s Five Lessons Learned to Combat Scams in 2021

    According to the Federal Trade Commission, Americans have reported over 226K scams and lost over $386M in frauds linked to COVID-19. Due to the rise in fraud, federal experts across the government share official information on how to recognize, avoid and report many types of scams.

  • USAGov’s Five Tips for the 2021 Tax Season

    As the tax season approaches, you may have questions about filing your federal, state and business taxes in 2021. Economic Impact Payments, tax credits and other relief provided in 2020 have many people wondering how to file during the pandemic.

  • Get Help From USAGov This 2020 Holiday Season

    The 2020 holiday season is one like never before. Due to the pandemic, people across the U.S. have adjusted the way they work, shop, and connect with others.

  • USAGov Answers FAQs About Voting

    The coronavirus pandemic makes the 2020 election season different than any before it. And it’s leaving a lot of people looking for information on how, where, and when to cast their vote.

  • USAGov’s Quick Guide to Voting in 2020

    Election Day 2020 is just about six weeks away. With voter registration deadlines approaching soon, it’s time to make sure you’re ready.

Share This Page:
Top