How to Apply For Student Loans
Applying for student loans is not at all difficult so long as you know what you’re doing. By knowing what you’re doing, I mean that you need to know what type of loan you want to pursue, how much you need to borrow and several other factors in order to keep on top of this loan process.
Applying for Federal Student Loans
If you want to try to qualify for a federal student loan, you’re going to have to fill out the FAFSA. The FAFSA can help you qualify for all sorts of financial aid besides loans, including grants, scholarships and work-study programs. Even so, federal student loans also require the FAFSA to get your name in the running.
After you submit your FAFSA no later than March 2, you should receive a letter in the mail a few weeks later that includes your Student Aid Report. This shows how much money you and your family are expected to contribute to your education financially. In another few weeks, you should receive your award letter in the mail. The award letter details exactly what forms of financial aid you have qualified for. If you can get a federal student loan, it will be outlined here, including the amount you can receive.
If you decide to accept the loan, whether it be a Federal Stafford Loan, Federal Perkins Loan or even a Federal PLUS Loan, you will need to indicate as such on the letter and return it to the appropriate parties. At this time, you can select a lender for your loan and once you do, you will need to fill out a Master Promissory Note. With all of this said and done, you should receive your first loan payment a little bit before the semester starts. There’s nothing to it, really. Just submit everything on time and you should be fine.
Applying for Private Student Loans
Private student loans are a little bit different than the federal student loans. You don’t have to fill out the FAFSA to be considered for them and there’s no income ceiling. However, you will need to approach things a little bit differently with the private student loan. For instance, you’re going to have to go to your bank or credit union directly in order to borrow money. You’ll need to fill out a loan application form. A credit check will then be run to ensure you are a responsible borrower.
This is where a snag comes into play. Most college students don’t have very much credit, if any at all. So what can you do in these cases?
Get a Student Loan Cosigner
A cosigner, if they have better credit than you, can help you secure a private student loan at a much lower interest rate. In this case, you both will sign the loan application form.
Now, you may not have to begin repaying your loan until you graduate from college, but the interest will accrue. Just be prepared for this added interest when it’s time to start repayment. After so many months of timely payments, you should start to see a slight reduction in your interest rate. This can help tremendously when it comes to month-to-month payment amounts.
So, you see, applying for student loans is not hard at all. You just need to always be aware of the fine print and the common procedures associated with borrowing money. The federal student loans are obviously a better option, but if you do not qualify, there are plenty of private student loans from reliable student loan companies that can make college an affordable dream.