Summary: How to Get a Student Loan
In this article, we will attempt to provide a simple yet informative guide on how to get a student loan.
Not only will we discuss how to apply for student loans, but we will also examine different types of loans, the steps involved in how to apply for student loans, and loopholes on how to get money for college in difficult situations.
If you are a college student trying to figure out how to pay for college or you are a parent trying to help a child, this article will help you understand the basics. Figuring out how to get loans for college is not easy, but with the right tools and information, the process can be less difficult than you think.
Here, at Advisory HQ, we want to help you learn how to get student loans in the fastest and simplest way possible!
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First Steps – How to Get a Student Loan
Before deciding to take out a student loan, there are some steps you must take in order to learn how to get student loans and what will be best for you. The first step, before learning how to apply for a student loan, is to consider your scholarship options.
Scholarships provide one option of how to get money for college without causing students to go into debt. They offer a way for students to receive money with no strings attached, based on their performance in high school. There are thousands of scholarships out there that are specialized for certain students. Whether you are an athlete, a science lover or an artist, there are scholarships you can apply for.
The application process is a big step since many scholarships require essays and additional information in order to apply. However, they are worth the effort because this is money you do not have to pay back.
Filling out the FAFSA
After assessing your scholarship options and moving forward with how to get a student loan, you will want to fill out a Free Application for Federal Student Aid, also known as a FAFSA. This form is used by the United States Department of Education in order to analyze a student’s financial need for college.
When figuring out how to apply for a student loan, filling out a FAFSA should always be your first step. It is an all-inclusive way for the government to decide if you are eligible for grants, work-study programs, and federal student loans. Student loans have to be repaid while the FAFSA can assist you in figuring out how to get money for college that doesn’t need to be repaid.
Outlining Expenses and Researching Loans
While many students go into college not knowing what they want to do, a good step before figuring out how to get a student loan is to try and figure out your expenses as well as what your starting salary might be after college.
There are many online calculators that can help you calculate your total college expenses for your specific school. You can also research your expected job field for starting salaries so that you can estimate how fast you will be able to pay off your student loan.
Once you have the basic information you need, you will want to research different student loans and compare their terms. Learning how to pay for college without financial aid is not easy, but with some intense research, you can find out how to apply for a student loan and which one is best for you. When researching, compare repayment options, interest rates, and loan terms. Make sure you do not end up in the dark with the loan you choose.
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Different Types of Federal Student Loans
There are many different types of student loans to choose from when learning how to get a student loan and how to apply for a student loan. It is important to be aware of the different types of student loans in order to choose the best fit for you as a student.
Stafford Loans
The most common loan that is looked at when figuring out how to get a student loan is the Federal Stafford Loan. This loan can be either subsidized or unsubsidized. Subsidized means the government will pay the interest on the loan while the student is in college whereas unsubsidized means the government will not pay the interest.
Subsidized Stafford Loans require a student to prove financial need while unsubsidized Stafford Loans do not. The maximum loan amount for a Federal Stafford Loan over four years of college is $31,000.
For the academic year of 2014–2015, the interest rate for both subsidized and unsubsidized federal Stafford Loans was 4.66%. Repayment for Stafford Loans begins 6 months after graduation but can range in payment options from 10 to 25 years. Learning how to get loans for college is a complex task, but knowing these different types is a great place to start.
PLUS and Perkins Loans
Other types of student loans that will help you figure out how to get money for college include Parent PLUS Loans, also known as Direct PLUS Loans, which are offered to parents with good credit. The interest rate on this loan is higher, at 7.21% in the 2013– 2014 academic year. However, this loan will pay for all of the student’s financial needs in college with other financial aid subtracted.
Along with the Parent PLUS Loan, there is the Perkins Loan, which is awarded from colleges to students with great financial need. These federal loans are given directly from the Institution of Higher Education (IHE). This loan has a 5% interest rate and will award a maximum of $20,000 per student over four years. The repayment for the Perkins Loan starts 9 months after graduation. The Perkins Loan is usually reserved for high financial need students whose parents make less than $25,000 a year.
Consolidation Loans
The last option for federal student loans, when deciding how to get loans for college, is to consider consolidation loans. This type of loan will combine all of your federal loans into one in order to make the repayment process easier. For consolidation loans, the repayment process can be extended to up to 30 years. While a consolidation loan may help extend your loan repayment, it is important to be careful with this type of loan since extending your combined loans can significantly raise the cost over time.
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How to Get Private Student Loans
Aside from the student loans listed above, there is another option on how to get student loans. There is another world that involves private student loans which are provided by banks and other lenders. These loans typically have interest rates between 3–12%.
Forbes.com explains that private student loans should be your last resort when figuring out how to get money for college. This is because these loans come with higher interest rates and larger fees. Credible.com is a great place to research private student loans and find the best deals if you do end up resorting to private student loans in your selection process.
One benefit to choosing a private student loan, when learning how to get money for college without financial aid, is that these loans can be used for educational expenses other than just tuition, books, housing, etc. Also, funds from private student loans are usually disbursed more quickly.
How to Apply for Student Loans
Once you have done your research, filled out your FAFSA, and decided which loan is best for you, it is time to learn how to apply for a student loan. If you decide to apply for a federal student loan, you will work directly with your school in order to see your options, figure out the amount of money offered from the government, and fill out paperwork in order to officially accept the loan.
A Master Promissory Note (MPN) is a common form that students will sign electronically when they decide to accept a federal student loan. This online document will also require students to take a short online course on loans so that they know how to get money for college and what these loans require.
Since private student loans are offered by thousands of different organizations and companies across the United States, the process on how to apply for student loans that are private might vary more. Most banks and lenders will require the student to have good credit or a cosigner with good credit. They will also require proof of identity and signatures on a series of documents relating to the loan being offered.
How to get a student loan and how to apply for a student loan are not difficult processes to figure out; however, the research behind choosing the right one is the most important part. Simpletuition.com offers a great guide on different student loan options and how to get loans for college.
How to Get Money for College Without a Co-Signer
Federal student loans do not require a co-signer, which is why they are the best option for students with no credit or students whose parents have bad credit. However, sometimes, private student loans are the only option for students figuring out how to get a student loan.
When figuring out how to get a college loan without a co-signer, you need to build credit, as well as a great loan application, for the private lender you are asking for money from. It can be hard to show good credit history as undergraduates since most students have no bills in their name. Therefore, private lenders cannot determine your financial responsibility. This is why many private loans require co-signers.
However, there are also many undergraduates who are older adults that do have bills and a credit history. If this is the case, building good credit will make it easier for you when learning how to get a student loan without a co-signer. For these students applying for private loans with a credit history, make sure you research your credit score and other forms of credit that the private lender will consider.
When looking at this issue from reverse, students who have bad credit or who have no credit history can benefit from finding a co-signer with good credit. Whether this is a close friend or parent, a co-signer will allow students to figure out how to get student loans from a private lender without building credit themselves.
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The Lowdown
When learning how to get a student loan, it is extremely important to do extensive research and read articles, such as this one, in order to find the right fit. There are many excellent resources across the Internet that can help you compare both federal and private student loan options.
Figuring out how to get money for college is not nearly as difficult as it may seem because the truth is, most people need help to pay for the increasing tuition prices across the nation. Make sure you consider your scholarship options first as well as any grants you may be eligible for after filling out your FAFSA. Money that does not have to be repaid is obviously the most valuable.
This article should be beneficial in learning the basic types of student loans. Learning how to apply for student loans is as simple as following directions. With the right amount of financial need, good credit history or just strong research to find an accepting lender, you will be able to pay for college without any hassle at all.
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