Many college students finance their education through government student loans or private student loans. If you need help paying college, you need to learn how to apply for a student loan.
Although the process is not complicated, it varies depending on what type of loan you are looking for. In many cases, you can end up applying for both types of student loans.
When deciding between federal loans and personal loans, you want to Compare interest rates – as there are differences in the interest rates on these loans.
In general, you should start with federal loans, which usually come with lower interest rates and cheaper repayment options. When you run out of this resource, there is always a time to turn to Student Loans to help fill in the gaps. There is several reasons to opt for a personal student loan, which can help finance additional study expenses.
Here you will find step-by-step instructions on how to apply for a student loan.
How to apply for a federal student loan
To apply for a federal loan, you must Free application for federal or FAFSA study grants. This is what the loan application process looks like:
- Step 1: Gather your financial data
- Step 2: Go to FAFSA.gov
- Step 3: Wait up to 10 days
- Step 4: Pay attention to the notices of grant for financial aid
Step 1: Gather Your Financial Data
You need your (or your parents) tax returns for the last two years, the adjusted gross income of your household, information about your household assets and the social security numbers for you and your parents. You will also need a list of schools to which you would like to apply when completing the FAFSA application.
Step 2: go to FAFSA.gov
Create an account on FAFSA website, and complete the online application. You will need all of the information you gathered in Step 1 to fill out the form.
A nice bonus at FAFSA is that it also doubles as a federal grant application – these are funds that you don’t have to repay (or pay interest). Some commonly used federal grants are Pell grants and TEACH grants.
Step 3: wait up to 10 days
Once your application has been processed, you will receive a study grant report detailing all of your financial details – including the amount your family is expected to contribute to your education. Unless you find any errors in this report, it will be sent to the schools to which you are applying for evaluation.
Step 4: keep an eye out for donation notices
Grant letters can make a difference in deciding which school to attend. The awards vary depending on the university. If you do decide to accept an award, there is usually a form that you send back via email or an online portal that you must log into in order to proceed with the offer.
A note on federal student loans
Federal loans such as Stafford loans, Perkins loans, or Direct PLUS loans are usually the best option to cover college expenses.
These come with flexible interest options (some don’t get interest throughout school) and offer many perks such as grace periods, deferred unemployment, income-based loan payment plans, and even total loan lending if you go into public service after graduation. There are even parenting loans available if your mom or dad wants to take on a financial burden.
How to apply for a private student loan
When you’ve exhausted your federal loan options or just need additional funding, you can consider private student loans that you can get from a bank or lender.
Here’s the general process for private student loans:
- Step 1: Find Multiple Lenders For Student Loans
- Step 2: Compare rates from multiple lenders
- Step 3: collect your financial information
- Step 4: Complete the Lender’s Online Application
- Step 5: agree to a credit check
- Step 6: wait for your results
Step 1: Find Multiple Lenders For Student Loans
Lots of banks, and even credit unions Online lenders offer private student loans. You can also check with your personal bank or credit union. Here are some of the best private student loan providers in 2020 that will hopefully meet your financial goals. according to the resident experts at Credible.
Step 2: Compare rates from multiple lenders
Get price quotes from at least a handful of lenders. Since interest rates vary widely depending on the lender, this can help ensure you get the best deal on your loan. To streamline the process, Consider a tool like Credible, which allows you to compare the prices of several private lenders at the same time.
Step 3: collect your financial information
You need to know your annual household income and have up-to-date tax returns, bank statements and information about your assets on hand.
Step 4: Complete the Lender’s Online Application
Complete your selected lender’s application (if available) or contact a loan officer to get started. You must also a. to complete Self-assessment form for a private education loan application and submit it to your lender.
Step 5: agree to a credit check
If it is your parents or someone else Co-sign your loan, they also have to undergo a credit check. In general, if you’re a bachelor’s degree or are low on credit, you can expect to need a co-signer for any personal student loan. Just make sure you choose someone who is financially responsible and has good credit.
Step 6: wait for your results
Once the lender assesses your creditworthiness and application, they determine how much you can borrow and under what conditions. You can then accept or decline the offer. If you agree, the loan proceeds go to your school which will credit your account.
A note on private student loans
Personal loans are credit basedwhat has its advantages and disadvantages. On the good side, there’s a chance you’ll get a better interest rate than a federal loan. The disadvantage? You (or mom and dad) need a great credit history to keep them secure. Usually, personal loans also don’t have the same benefits as federal loans (like income-based repayment plans, interest grace periods, and more).
When to apply for a student loan
The timing of your application also depends on the type of loan you are applying for. There are tough deadlines with federal student loans that you have to adhere to if you want funding in time for the coming school year. If you are looking for a private student loan, you can always apply, although you will likely want to do so early enough to cover any school-related expenses that may arise.
Federal Student Loans
If you want your federal student loans by the fall semester, you must have submitted your FAFSA by the end of June 30th (Central Time). However, individual colleges and states may have different deadlines. So call your school’s tax office and check List of state deadlines way ahead of time.
Private student loans
Apply for a student loan at least a few months before the school-related costs that you need help with. To be on the safe side, contact your school and find out when your first tuition fees and housing allowances are due. Then apply for your loan in good time. Depending on your lender, it could take a few weeks for you to go through the application process and receive your money.
Remember to use one Online student loan calculator before you apply for a personal loan and make sure you are not borrowing more than you need. You should also a. use Tool like Credible to compare interest rates without affecting your creditworthiness.
Know how much you need before you apply
When you take on debt, you should take it slowly and only take on what you need. Always start with cheaper federal loans first – ideally directly subsidizedthat do not earn interest during school time (non-subsidized). Once you have exhausted those, move on to personal student loans.
Just be sure Use a website like Credible before choosing your lender. Prices and terms vary from place to place, so with just a few additional offers from lenders, you can save significantly in the long run.