Get a Student Loan
As you probably know, a college education is usually quite expensive in the US. Most students here cannot actually afford higher education without getting financial aid. This is where student loans come to help. That’s why we provide the information you need on how to get a student loan, here.
These days college education can cost easily tens of thousands of dollars. Of course, such costs are not usually affordable for an average student. But student loans can allow you to cover these costs and repay them over a long time piece by piece.
These days, there are many options to get a Student Loan. These loans typically offer lower interest rates compared to other loan types. And some offers have even more advantages. To help you benefit from such student loans, here we are going to look at the important points you should know about to get a student loan.
Federal Student Loans and Private Student Loans
The first factor to consider when choosing student loans is to decide if it will be a Federal student loan or a Private student loan.
Federal student loans are the ones that are backed by the government. They offer better rates and repayment terms. However, their requirements can be higher to meet. But they may also offer loan forgiveness in the future.
Private student loans, on the other hand, are easier to get. But in general, you would need to accept somewhat higher interest rates with them. Private loans also tend to cover higher amounts compared to federal alternatives.
Which one you should get, Federal or Private?
While both Federal Student Loans and Private Student Loans have their own advantages and disadvantages, we recommend starting with federal loans in your applications. As these loans are usually easier to repay and they are often the cheapest loans in the market, they are less likely to make you regret them later.
After you are checked all the federal student loan options, you move on to private ones. Just be more careful about picking private student loans. As you would want to find an ideal one that will cover your expenses as much as possible with optimal interest rates.
Before You Apply to Get a Student Loan
Before you go and apply for the student loan offers you find, there are a few things that you should do. First, you should calculate the total amount that you need the loan to cover.
Although you may not get a single loan to cover all this total, you may pick an optimal offer to cover as much as possible. Do not focus on just covering the tuition fees. During an education, students will need some funding for many things, books, food, accommodation, traveling, clothing, and more.
Then you should check your credit score. If you will need a private student loan, your credit score will play a critical role. If your credit score is above average, you should be okay, but if you don’t have a good score, you may need to find someone with a better score to be your co-signer before your applications.
How to apply for federal student loans
Applying for federal loans is usually easier as there are well-known systems that gather them in one place.
First, you need to submit your ‘Free Application for Federal Student Aid‘, also known as just ‘FAFSA’. This application can be filled online through the studentaid.gov website (https://studentaid.gov/h/apply-for-aid/fafsa).
This process is quite easy as you can follow the directions step-by-step. However, you will need to send some financial details for your application. So you should gather proof of income, bank statements, tax reports, and other financial details for both yourself and your parents. These details will be used to determine the amount of loan you can get.
The deadline for FAFSA applications is the end of June. But you can send your application at the start of October before your education starts. You should try to do it as early as you can as applying early can let you have some advantages with certain loans that are only available for a small number of early applicants.
After your application, you will need to wait for a while until your application gets processed. After the processing, The Department of Education will send their response to your school’s office for financial aid. This office will notify you regarding the response you got. This generally happens around the end of the first quarter of the year.
This response you will get, aka your FAFSA award letter, will list the financial aid options that you are qualified for. These options may include standard student loans, scholarships, grants, and work-study programs.
The next step is to choose the options that you want. You can pick more than one aid offer if you want. After you made your decision, you need to notify your school’s financial aid office and follow their directions to get the financial aid. Probably, there will be a face-to-face session to inform you about the details of the loans or programs you wanted to get. After that, you will sign a Master Promissory Note and it will be done. In the US, students receive federal student loans through their schools. So, when and how you will actually get the funding can change depending on your school.
How to apply for private student loans to get a Student Loan
When it comes to finding a private student loan, it can be a bit more difficult to pick as there are many options in the market. You should do a lot of research and try to find the lower interest rates available. You should also consider the extra fees and other costs, as well as the repayment terms if you have a preference for that aspect.
These days most student loan lenders have websites that you can use for finding out their interest rates, repayment terms, and loan limits. Although for more information you may need to contact lenders and provide your details, such essential numbers can help you make a list and compare lenders to rate them based on your needs.
After you are satisfied with your list of lenders, you can pick your top option and make your application. Many lenders allow you to send your initial application online. This first application is not for the actual loan but more like a pre-qualification application. Even if you apply online you need to visit the lender’s office to provide our documents and sign the papers. If your credit score is not high enough, and you got rejected because of this, you may consider bringing in a co-signer during this process too.
When your application gets approval, it can take a number of weeks to get the funding. Depending on the type of student loan you applied for, your funding may automatically be transferred to your school to cover tuition fees, and costs like dorm payments. Otherwise, the lender will wire the funding to your bank account and you can use it as you need.