How to apply for student loans — federal and private

Contents
  1. Choose a student loan | Consumer Financial Protection Bureau
  2. Perkins Loans
  3. Direct Loans
  4. Parent or Grad PLUS Loans
  5. Private Loan Options
  6. State Agency Loans
  7. Traditional Bank Loans
  8. School Loans
  9. How to Apply for Student Loans: Federal and Private
  10. Start with federal student loans
  11. What type of federal student loans can I get?
  12. How much can I borrow in federal student loans?
  13. What interest rate can I expect with federal student loans?
  14. When to use private student loans
  15. How to apply for private student loans
  16. College Ave
  17. Variable vs. Fixed Loan Interest Rates
  18. Federal Student Loan Repayment Plans
  19. Income-Based Repayment
  20. Forbearance and Deferment Options
  21. Loan Forgiveness
  22. Discharge in the Event of Loss or Disability
  23. In-School Payments
  24. Grace Period
  25. Refinancing Federal Loans to Private
  26. Federal Student Loan Eligibility
  27. Financial Need
  28. Borrow Limits
  29. Student Status
  30. Matriculation vs. Non-Matriculation
  31. Private Student Loans
  32. Types of Private Student Loans
  33. Private Undergraduate Student Loans
  34. Private Parent Student Loans
  35. Private Graduate Loans
  36. Private Student Loan Interest Rates
  37. Private Student Loan Repayment Plans
  38. Private Student Loan Eligibility
  39. Federal vs. Private Loan: Which Student Loan Is Better for Me?
  40. Benefits of Federal Student Loans
  41. Benefits of Private Student Loans
  42. Federal Direct PLUS Loan vs. Private Loan
  43. “What’s the difference between financial aid and student loans?”
  44. How to apply for student loans — federal and private
  45. How to apply for federal student loans
  46. Step 1: Gather your financial info
  47. Step 2: Go to FAFSA.gov
  48. Step 3: Wait up to 10 days
  49. Step 4: Look out for financial aid award letters 
  50. A note on federal student loans
  51. How to apply for private student loans
  52. Step 1: Find several student loan lenders
  53. Step 2: Compare rates from multiple lenders
  54. Step 3: Gather your financial details
  55. Step 4: Fill out the lender’s online application
  56. Step 5: Agree to a credit check
  57. Step 6: Await your results
  58. A note on private student loans
  59. When you should apply for a student loan
  60. Federal student loans
  61. Private student loans
  62. Know how much you need before applying

Choose a student loan | Consumer Financial Protection Bureau

How to apply for student loans — federal and private

  Federal Loans Private Loans
How to repay6-month grace period for loans made to undergraduates. Grad PLUS loans have no grace period, but parent PLUS loan borrowers may request a 6 month deferment.Flexible monthly payments income or financial hardship, and possible debt forgiveness for certain periods of teaching, military service, and other public service work6-month grace period for most loansVery limited flexibility for those with financial need or hardship
Interest RatesRates are fixed.Subsidized Direct Loans have no interest while you're in school.Interest rates are set the loan program and do not depend on your credit record.There are also fees associated with Direct Loans. The loan fee is a percentage of the loan amount. Direct Loan fees are deducted from each loan disbursement. The percentage varies depending on the type of loan and when the loan is first disbursed.Rates are often variable – they can change over time. Fixed rate loans may be available.You are charged interest while you are in school.Interest rates vary depending on your credit and other factors.Some lenders may charge various fees, an origination fee.
Who is eligibleAlmost everyone is eligible for federal loans.Lenders decide eligibility your credit and other factors, and undergraduate students typically need a co-signer to qualify or obtain better terms.
Loan How much you can borrow varies, depending on the type of loan, whether you are an undergraduate or graduate student, your year in school, and dependency status. Your borrowed amount cannot exceed the cost of attendance minus any other aid you receive.Generally, undergraduate limits range from $5,500 per year for dependent freshman to $12,500 per year for independent students who are juniors or beyond. Most graduate students can borrow up to $20,500 per year.There are no set dollar limits on Parent PLUS Loans or Graduate PLUS Loans but the amount may not exceed the cost of attendance minus any other aid received.More info on federal loan limits is available from the Department of Education at studentaid.ed.gov.How much you can borrow varies, depending on your credit and other factors, but generally, you should only borrow what you need and you should not borrow more than your college costs.

Federal student loans generally cost less and offer more flexible repayment plans than private loans. You must complete the Free Application for Federal Student Aid (FAFSA) to be eligible for federal student loans.

Either subsidized or unsubsidizedMost students are eligible for the Unsubsidized Direct Loan. Subsidized Direct Loans are awarded financial need.Available to graduate students and parents of undergraduatesParents with PLUS loans are responsible for repaying those loans and not the student. A Direct PLUS loan made to a parent cannot be transferred to the child.

There are many different private loan options, with different interest rates and costs. Generally, private student loans have higher costs than federal student loans and require a co-signer.

Borrowing beyond your federal loans could mean high levels of debt. Make sure you have explored all other options including applying for additional scholarships, cutting costs, or getting a part-time job before taking out a private loan. If you are still deciding where to go to school, consider all your options, including finding a low-cost school.

However if you need a private student loan, you should know that there are some unexpected places to look for deals. It's important to shop around and compare different loan offers.

Loans offered by states to residents, or for students attending school in the stateAsk your school's financial aid office for more information about “state sponsored alternative loans.”These loans come from commercial banks. You may be more familiar with their checking or savings accounts.Talk to your parent or someone you trust about this option because you will ly need a co-signer.Some schools have their own loan program for students, which tend to have fixed ratesAsk your school's financial aid office for more information
More info More info More info

Federal student loans almost always cost less and are easier to repay than private loans. You must complete the Free Application for Federal Student Aid (FAFSA) to be eligible for federal student loans.

Perkins Loans

Subsidized with a fixed 5% interest rate, administered through your school, and awarded financial need

If you are eligible, you should take this loan first

Direct Loans

Either subsidized or unsubsidized

Everyone is eligible for the Unsubsidized Direct Loan, and Subsidized Direct Loans are awarded financial need

Parent or Grad PLUS Loans

Available to graduate students and parents

Parents with PLUS loans are responsible for repaying those loans

Private Loan Options

There are many different private loan options, with different interest rates and costs. Generally, private student loans have higher costs than federal student loans and require a co-signer.

Borrowing beyond your federal loans could mean high levels of debt. Make sure you have explored all other options including applying for additional scholarships, cutting costs, or getting a part-time job before taking out a private loan. If you are still deciding where to go to school, consider all your options, including finding a low-cost school.

However if you need a private student loan, you should know that there are some unexpected places to look for deals. It's important to shop around and compare different loan offers.

State Agency Loans

Loans offered by states to residents, or for students attending school in the state

Ask your school's financial aid office for more information about “state sponsored alternative loans”

Traditional Bank Loans

These loans come from commercial banks. You may be more familiar with their checking or savings accounts

Talk to your parent or someone you trust about this option because you will ly need a co-signer.

School Loans

Some schools have their own loan program for students, which tend to have fixed rates.

Ask your school's financial aid office for more information.

Источник: https://www.consumerfinance.gov/paying-for-college/choose-a-student-loan/

How to Apply for Student Loans: Federal and Private

How to apply for student loans — federal and private

Student loans aren’t created equal. Some are federal, some are private, some are designed to help financially needy borrowers, some offer lower rates or important borrower protections. Many students have to combine different types of loans to cover their college costs.

» MORE: Types of student loans: Which is best for you?

“I am a huge fan of comparing what works best for each family,” says Jodi Okun, founder of College Financial Aid Advisors, which helps families figure out how to pay for college. “I don’t think there’s a set rule that works best.”

If you have to take out loans to pay for college — and most students do — it’s important to understand all your federal and private student loan options before you make any decisions.

» MORE: Your guide to financial aid

Start with federal student loans

Federal loans are ly your best student loan option. They offer more generous borrower protections than private student loans do, such as the ability to switch to an income-driven plan if you can’t afford your monthly payments or to defer payments if you lose your job. Turn to private loans only after you’ve borrowed as much as you can in federal loans.

The Free Application for Federal Student Aid, or FAFSA, is the application for all federal student loans. Filling it out is also your ticket to need-based aid — including federal grants, work-study and some scholarships — if you qualify.

» MORE: What is financial aid for college? 

What type of federal student loans can I get?

There are several types of federal student loans:

  • Direct subsidized loans are earmarked for undergraduate borrowers with a financial need. If you qualify, you won’t be responsible for any interest that accrues while you’re in school.
  • Direct unsubsidized loans are the most common type of federal student loan. Un subsidized loans, they’re available to both undergraduate and graduate borrowers and they do accrue interest while you’re in school. The interest is capitalized (added to your balance) at the end of your grace period.

» MORE: Federal Student Loans Review

  • Grad PLUS loans are for graduate and professional students and don’t have borrowing limits. Un undergraduate loans, which don’t consider borrower credit, you need decent credit to qualify for a grad PLUS loan. The government wants to make sure your credit report is free of negative marks bankruptcies, charge-offs or past-due debt, says Karen McCarthy, director of policy analysis at the National Association of Student Financial Aid Administrators.
  • Parent PLUS loans are for parents with dependent undergraduate students. Parents’ credit histories must be tarnish-free to qualify. They can borrow as much as they need to cover their student’s college costs.

» MORE: Compare parent loans for college: PLUS and private

How much can I borrow in federal student loans?

You can take out multiple types of federal loans if you qualify, but there are limits on how much you can get in student loans  your loan type, your year in school and whether you’re a dependent or independent student. There are also limits to how much you can borrow throughout your entire higher education. Note that the total limits for graduate borrowers include any loans they borrowed as an undergraduate.

What interest rate can I expect with federal student loans?

Congress sets interest rates for all these loan types each year, but the new rates apply only to new loans. Your interest rate is locked in throughout the life of your existing loan.

When to use private student loans

You should consider federal student loan options first, but private student loans can be a good option for some borrowers, such as students who’ve borrowed the maximum amount of federal loans and still need money.

Parents and graduate students with good credit — or undergrads who have a co-signer with good credit — may also be able to get a better interest rate with a private student loan than a federal one.

Brendan Coughlin, president of consumer deposits and lending at Citizens Bank, estimates that more than half of borrowers could qualify for a better rate with a private loan, unless they qualify for a federal direct subsidized loan.

Still, McCarthy encourages borrowers to stick with federal student loans — even if they could get a better rate with a private loan — because federal loans offer income-driven repayment plans, deferment and forbearance options, and forgiveness programs. Some private lenders offer some of these benefits, too, but they’re typically not as favorable as the federal versions.

How to apply for private student loans

Un most federal student loans, private student loans require a full underwriting process. Lenders look for borrowers who have good credit and enough extra cash to make loan payments given other expenses — that is, a relatively low debt-to-income ratio. If you don’t meet those requirements, you may need a co-signer to qualify for a private student loan.

Banks, credit unions, online companies and state-based agencies all offer private student loans. With so many options, it’s important to compare interest rates, fees and borrower protections before you choose a lender.

» COMPARE: Private student loan options

Источник: https://www.nerdwallet.com/article/loans/student-loans/student-loans-federal-vs-private-loans

College Ave

How to apply for student loans — federal and private

Federal student loan interest rates and fees are set at the start of each academic year and remain fixed for the life of the loan.

Federal loans come with a standard repayment schedule and offer a wide range of repayment assistance options, including forgiveness for qualified borrowers, forbearance, deferments, and Income-Based Repayment (IBR) or Pay As You Earn (PAYE and REPAYE) plans that tailor the monthly payments to your income level. For more details on eligibility criteria, repayment assistance, and current rates, visit the Federal Student Aid website.

To apply for federal student loans, you need to complete the Free Application for Federal Student Aid (FAFSA).

Variable vs. Fixed Loan Interest Rates

A variable interest rate can fluctuate over the life span of a loan. A fixed interest rate is just as it sounds – fixed and unchanging for the life of a loan.

While all federal student loans come with a fixed interest rate, private student loans offer students the flexibility of a variable interest rate in addition to a fixed interest rate option. At the time of your loan disbursement, you might discover that variable interest rates are lower than the federal student loan fixed rate, but there are advantages to having a stabilized rate.

To learn more, see our Variable vs. Fixed Interest Rates resource page.

Federal Student Loan Repayment Plans

Every loan comes with terms for how and when you will be required to repay it. The repayment “term” usually refers to the amount of time you are given to repay your loan. Paying the loan back sooner will result in a lower overall cost but will result in larger monthly payments. Repayment “terms” can also refer to different options for repayment.

In the case of federal student loans, the Department of Education (DOE) sets out all terms for repayment. If circumstances make monthly payments difficult to meet, the DOE has programs that can lower or erase your monthly payments, and/or extend your repayment duration.

Income-Based Repayment

With an Income-Based Repayment (IBR) plan, monthly loan payments are capped a percentage of your discretionary income, with remaining debt forgiven after a specified number of years (usually 20 to 25 years, depending on the IBR). “Pay-As-You-Earn” (PAYE) and the “Revised-Pay-As-You-Earn” (REPAYE) fall into this category.

There are pros and cons to IBR. On the upside, reduced monthly payments can alleviate a financial burden. On the downside, accrued interest and a longer repayment term can cost you more over time.

Parent PLUS loans and private student loans are not eligible for Income-Based Repayment plans.

Forbearance and Deferment Options

Forbearance and deferment are terms that refer to a period during which your federal student loan monthly payments are postponed or reduced due to financial hardship or other circumstances.

The type of federal loan you’ve been issued determines whether interest will accrue during this time. Deferment often refers to postponements or reduction periods for federal loans issued to students who have demonstrated financial need (Direct Subsidized Stafford loans and Perkins loans), during which interest will not accrue.

Interest will accrue during postponement or reduction periods for all other types of federal student loans.

Loan Forgiveness

Student Loan Forgiveness is sometimes referred to as “cancellation” or “discharge.” These terms are essentially interchangeable, but they are used in different situations that qualify for complete loan forgiveness.

Discharge in the Event of Loss or Disability

Permanent disability can qualify you for student loan cancellation. Death also qualifies as a life event that cancels or discharges a loan. The death of a parent cancels a Parent PLUS loan, while the death of a student cancels out a federal loan issued in that student’s name.

In-School Payments

You have the option to start paying off your student loan while you are still in school. This saves you money but is not required with federal student loans.

Grace Period

The government offers a grace period, during which you do not need to pay anything on your loans until at least six months after graduation.

Refinancing Federal Loans to Private

In some cases, borrowers might choose to refinance federal loans to private. This option is usually exercised to obtain a lower interest rate or to release a cosigner from their obligation to the loan.

However, when you switch from a federal repayment program to a private one, your loan might be subject to the fluctuations of variable interest rates and you will no longer be eligible for the protections and benefits, income-based-repayment and loan forgiveness.

Federal Student Loan Eligibility

To apply for a federal student loan through FAFSA, you must meet the Department of Education’s basic criteria. Depending on the type of federal loan you pursue, there could be additional requirements.

Financial Need

If you are interested in securing a Direct Subsidized Stafford Loan or a Perkins Loan, you will need to demonstrate financial need.

Financial need is your cost of attendance (tuition, fees, expenses, room and board) as submitted by your school. This amount is compared to your EFC (Expected Family Contribution) which considers factors such as:

  • Your family’s income (taxed and untaxed)
  • Your family’s current assets
  • Any benefits (such as Social Security and unemployment) you or your family receive
  • Size of your family
  • How many siblings you have attending college during the school year

Your EFC is subtracted from your cost of attendance (COA) to assess your financial need.

Borrow Limits

Federal loans have borrowing limits built-in. These can differ depending on the type of student and the type of loan. The government sets additional limits as follows:

  • Annual Loan Limits – the maximum amount you can borrow in a single academic year
  • Aggregate Loan Limits – the total amount you are allowed to borrow during your academic career (sometimes called a “cumulative limit”)
  • Cost of Attendance Limits (COA) – a stipulation that the loan must be less than the school’s official cost of attendance minus other financial aid received

Student Status

If your student status changes from full- to part-time, or if you need to temporarily withdraw from your studies, your student loans could be affected. Terms vary for each loan, so be sure to consult with your school’s financial aid office to make sure you understand any related changes to your loan responsibilities.

Matriculation vs. Non-Matriculation

A matriculated student refers to most college students – one who has been accepted to a college or university and is enrolled in classes toward the pursuit of a degree.

A non-matriculated student might refer to someone who is attending classes at that same school toward future matriculation status, or within a non-degree certificate program.

Federal student aid is not available to non-matriculated students, but there are some exceptions.

For example, if you are completing courses toward a teaching certificate or attending classes that are required to enter a degree program, you might qualify for a federal student loan.

Private Student Loans

Now that you’ve learned about federal student loans, let’s look at how private student loans differ. Private student loans require a credit and income review to determine an individual’s anticipated ability to repay the loan.

Types of Private Student Loans

What is considered a private student loan? The short answer is any student loan not issued by the government. Student loans other than FAFSA loans can be helpful to those who do not qualify for a federal student loan, or whose federal student loan does not cover enough of their expenses.

Private Undergraduate Student Loans

Private student loans for undergraduate students function similarly to other types of private loans in that a credit and income review will be required to determine your ability to repay the loan.

This review can also affect the interest rate on your loan. Since most undergraduate students have not yet established a credit history or have a steady income, it is often necessary to apply with a cosigner.

Learn more about undergraduate student loans at College Ave.

Private Parent Student Loans

Some private lenders offer parent loans, which are made to a parent or guardian who is helping a student pay for school; the student is not legally responsible to repay a parent loan.

Learn more about parent student loans at College Ave.

Private Graduate Loans

Private loans for graduate students work similarly to other types of private student loans; a graduate student might need a cosigner or have a parent or guardian take out the loan for them. However, if you’re a graduate student with a solid credit history, you could qualify individually for a lower interest rate.

Learn more about graduate student loans at College Ave.

Private Student Loan Interest Rates

Private loan terms, including interest rates and fees, vary by lender and usually are determined your credit history (and potentially other factors). Most lenders offer both variable and fixed interest rates.

A fixed rate remains unchanged for the life of the loan. This can be helpful when making financial plans, as your monthly payments will be known. Variable interest rates can fluctuate, which makes monthly payments harder to predict. However, depending upon your credit history, you might obtain a rate that stays relatively low, even with fluctuations.

Federal loans offer fixed interest rates, which is just one reason they are frequently considered beneficial over private student loans.

To see how interest rates affect the cost of your loan, check out our student loan calculator.

Private Student Loan Repayment Plans

When it comes to repayment after graduation, many private student loan lenders will offer payment assistance if it’s needed, but the available options are more limited than federal loans.

For example, private lenders typically cannot offer income-contingent repayment plans or loan forgiveness.

That said, the terms of a private loan can typically be altered after signing if assistance is needed.

The sooner you begin paying down the principal and interest on a private loan the better, but circumstances do not always allow for that. Repayment options vary by lender but common plans include:

  • Interest Only – You make interest-only payments for the first two years of the repayment term of your loan.
  • Interest Plus – You make interst payments, along with a monthly amount you determine for the first two years of the repayment term.
  • Full Principal and Interest – You start repaying your principal plus interest right away.

Some lenders offer more repayment flexibility than others. At College Ave., in addition to offering a forgiveness policy, we work with you on repayment options, should you encounter financial hardships.

Learn more about student loan refinancing options at College Ave.

Private Student Loan Eligibility

Since many students have limited credit history and income, private student loans typically require a cosigner. A cosigner is often a parent or other family member who has established credit and income who agrees to take equal responsibility to repay the loan if the student borrower is unable.

Apply for a Private Student Loan

Federal vs. Private Loan: Which Student Loan Is Better for Me?

A comparison of student loans doesn’t yield a one-size-fits-all answer, but because of the low fixed rates and repayment assistance programs that are available, it’s generally best for students to exhaust their federal Direct Unsubsidized and Subsidized Loans before considering private student loans. There are, however, limits to how much you can borrow under the Direct Loan program. Private student loans come into the mix if the federal funds are not enough to cover the cost of attendance.

Before deciding how you will finance your education, it is important to consider the differences between private student loans and federal loans as they apply to you and your overall financial picture.

Key variables to keep in mind include interest rates, repayment plans, and eligibility.

Benefits of Federal Student Loans

Benefits of federal student loans include:

  • fixed interest rates for the life of the loan
  • repayment assistance options (including income-based-repayment)
  • subsidized loans for those who demonstrate need

Benefits of Private Student Loans

A private student loan might offer a lower interest rate, depending upon your credit rating and income (or that of your co-signer). Some also offer higher borrowing limits and fixed interest rates. Private student loans do not require any demonstration of financial need.

Federal Direct PLUS Loan vs. Private Loan

If you are a parent or graduate student considering a Direct PLUS loan, you may want to consider a private student loan. If you have a strong credit history, you may be able to save money with a private student loan. Just make sure you review the benefits – such as public service forgiveness – that are unique to the federal program before you make your final decision.

“What’s the difference between financial aid and student loans?”

Student loans – federal and private – are all part of your financial aid package, which can also include scholarships and endowments. When you work with your school’s financial aid office directly, you are sure to get a complete picture of your options. Your school determines your costs, so that is a solid place to start exploring all assistance options.

Interested in a private student loan? At College Ave we make applying easy to understand, and you get an instant decision. Start your application here!

Источник: https://www.collegeavestudentloans.com/resources/federal-vs-private-loans/

How to apply for student loans — federal and private

How to apply for student loans — federal and private

Many college students finance their educations through federal student loans or private student loans. If you need help paying for college, you’ll need to learn how to apply for student loans.

Though the process isn’t complicated, it does vary which type of loan you’re seeking. In many cases, you may end up applying for both types of student loans.

When deciding between federal loans and private loans, you'll want to compare interest rates — as there are distinctions in how these loans charge interest.

Generally, you'll want to start with federal loans, which typically come with lower interest rates and more favorable repayment options. When you've exhausted that resource, you can always turn to private student loans to fill in the gaps. There are several reasons to choose private student loans, which can help finance additional college expenses.

Here's a step-by-step guide on how to apply for student loans.

How to apply for federal student loans

To apply for any federal loans, you’ll need to fill out the Free Application for Federal Student Aid, or FAFSA. Here’s what the loan application process looks :

  • Step 1: Gather your financial info
  • Step 2: Go to FAFSA.gov
  • Step 3: Wait up to 10 days
  • Step 4: Look out for financial aid award letters

Step 1: Gather your financial info

You’ll need your (or your parents’) tax returns for the last two years, your household’s adjusted gross income, information about your household assets and the Social Security numbers for you and your parents. You will also need a list of schools you plan to apply to when filling out the FAFSA application.

Step 2: Go to FAFSA.gov

Create an account on FAFSA's website, and fill out the online application. You’ll need all the info you gathered in Step 1 to complete the form.

HOW TO APPLY FOR FAFSA

A nice bonus with FAFSA is that it also functions as an application for federal grants — which are funds you don’t have to pay back (or pay interest on). Some commonly used federal grants include Pell Grants and TEACH Grants.

Step 3: Wait up to 10 days

Once your application has been processed, you’ll receive a Student Aid Report detailing all your financial stats — including the amount your family is expected to contribute toward your education. Unless you find any errors in this report, it will be sent to the schools you’re applying to for evaluation.

Step 4: Look out for financial aid award letters 

Financial aid award letters can make a difference when you're deciding which school to attend. Awards will vary by university. If you choose to accept an award, there’s usually a form you mail back or an online portal you’ll need to log into to move forward with the offer.

HOW TO COMPARE COLLEGE FINANCIAL AID OFFERS

A note on federal student loans

Federal loans, Stafford Loans, Perkins Loans or Direct PLUS Loans, are typically your best option for covering college costs.

These come with flexible interest options (some don’t acquire interest the entire time you’re in school), and they offer lots of perks grace periods, deferment if you’re unemployed, income-based loan payment plans, and even total loan forgiveness if you go into public service after graduation. There are even Parent Loans if your mom or dad wants to help shoulder some financial burden.

How to apply for private student loans

If you’ve maxed out your federal loan options or you just need additional funding, you can then consider private student loans, which you’d get from a bank or lender.

Here’s what the general process looks for private student loans:

  • Step 1: Find several student loan lenders
  • Step 2: Compare rates from multiple lenders
  • Step 3: Gather your financial details
  • Step 4: Fill out the lender’s online application
  • Step 5: Agree to a credit check
  • Step 6: Await your results

Step 1: Find several student loan lenders

Many banks, credit unions, and even online lenders offer private student loans. You can also check with your personal bank or credit union, too. Here are some of the best private student loan vendors in 2020 that will, hopefully, meet your financial goals, according to Credible’s resident experts.

Step 2: Compare rates from multiple lenders

Get rate quotes from at least a handful of lenders. Since interest rates vary widely by lender, this can help ensure you get the best deal on your loan. To streamline the process, consider a tool Credible, which lets you compare rates from several private lenders at once.

Step 3: Gather your financial details

You’ll need to know your annual household income and have any recent tax returns, bank statements and info about your assets on hand.

Step 4: Fill out the lender’s online application

Fill out your chosen lender’s application (if one is available) or get in touch with a loan officer to get started. You will also need to fill out a Private Education Loan Application Self-Certification form and submit it to your lender.

Step 5: Agree to a credit check

If your parents or someone else is co-signing your loan, they will need to submit to a credit check as well. If you’re an undergraduate or just have sparse credit, you can generally expect to need a co-signer for any private student loan. Just make sure you choose someone who’s financially responsible and has good credit.

7 THINGS YOU SHOULD KNOW ABOUT COSIGNING A STUDENT LOAN

Step 6: Await your results

Once the lender evaluates your credit and application, they’ll determine how much you’re eligible to borrow and at what terms. You can then accept or deny the offer. If you accept, the loan proceeds will go to your school, which will put them towards your account.

A note on private student loans

Private loans are credit-based, which has its pros and cons. On the good side, there’s a chance you might get a better interest rate than you would on a federal loan.

The downside? You (or mom and dad) will need to have a stellar credit history to secure it.

Usually, private loans don’t come with the same perks as federal loans, either ( income-based repayment plans, interest grace periods and more).

When you should apply for a student loan

The timing of your application will also depend on what type of loan you’re applying for.

With federal student loans, there are hard deadlines you’ll need to meet if you want funding in time for the upcoming school year.

If you’re seeking for private student loans, you can apply at any time, though you’ll probably want to do it early enough to cover any school-related expenses that may come up.

Federal student loans

If you want your federal student loan funds by the fall semester, you’ll need your FAFSA filed by the end of the day June 30 (Central Time). Individual colleges and states may have different deadlines, though, so call your school’s financial aid office and check this list of state deadlines well ahead of time.

Private student loans

You should apply for student loans at least a few months ahead of any school-related costs you need help with. To be extra safe, contact your school and find out when your first tuition and housing payments will be due. Then, apply for your loan well ahead of that. Depending on your lender, it could take a few weeks to get through the application process and receive your funds.

Remember, make sure you use an online student loan calculator before applying for a private loan, and make sure you don’t take out more than you need. You should also use a tool Credible to compare interest rates without affecting your credit score.

5 PRIVATE STUDENT LOAN TIPS YOU SHOULD FOLLOW, ACCORDING TO AN EXPERT

Know how much you need before applying

Any time you take out debt, you should proceed slowly and only take out what you need. Always start with lower-cost federal loans first — ideally direct subsidized ones, which won’t accrue interest while you’re still in school (unsubsidized ones will). Once you’ve exhausted those, move on to private student loans.

Just be sure to use a site  Credible before choosing your lender. Rates and terms vary from place to place, so just a few extra quotes from lenders could save you significantly in the long run.

THIS IS THE BEST WAY TO GET LOWER STUDENT LOAN RATES

Источник: https://www.foxbusiness.com/money/applying-student-loans-federal-private

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