How To Apply For Student Loans

By Nayra Mendoza on February 22, 2016

Student loans are a great service for students that need financial aid.

student loans

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The two types of loans offered to undergraduate and graduate students: federal and private loans. Banks offer student loans, the federal government has its own loan program, and companies award loans to applicants either by process of election or qualification. There are different ways to apply for student loans. Below are three different options of aid for you and how to apply.

Things To Know

Before you start applying for student loans, there is important information you must provide and loan terminology you should be familiar with.

Information needed from you is your name, a home address, your Social Security number or Identification Number, gross income, and a phone number to be reached at in any case. You also need to provide school information such as school name, major, and term or year.

When applying for the first time for loan aid, you will be asked to sign a Master Promissory Note. This is a legal document that ensures you understand and agree to the terms in which you are receiving your loan.

After you graduate, you’ll be given a grace period where you are not required to pay loans back yet. Use this time to settle down and choose a repayment plan. Knowing how long you have to get your ducks in a row can help you decide if the loan is a smart choice after all.

Interest rates are a major concept to understand when applying for student loans. Federal Student Aid offers the school year’s interest rates so you have an idea of how much you’ll be paying back. After including an estimated rate, make sure you’ll be able to pay off any money borrowed after your grace period.

If you are not eligible to receive a loan due to nonexistent or bad credit, cosigners are usually allowed to help you meet general loan qualification requirements. Cosigners provide their personal and financial information and legally promise to assist in paying back the loan. Cosigners can be anyone from a parent to a friend.

Know who you can call for help. Your parents will give you advice on how to manage your finances wisely. College financial advisers are usually available on campus to help you decide your best options and even assist with the application process. Loan providers might offer a number to call for any questions you could have about their loan application and payback process.

Federal Student Aid

The U.S. president allocates a budget to be used for nationwide education. This money is available to students who qualify based on your, your parents’, or your guardians’ earnings. The Free Application for Federal Student Aid is the best option for aid to all college students because the U.S. Department of Education provides students with the most accessible and affordable of loans.

There are subsidized and unsubsidized loans offered for undergraduate students by Federal Student Aid. Subsidized loans are a better choice of aid because the Department of Education will cover the interest rates until after your grace period or other agreement. You are responsible for paying the interest rates in unsubsidized loans.

How to apply:

1. Create an account at https://fafsa.ed.gov/.

2. Input all personal and financial information as accurately as possible. The U.S. government runs background checks on your answers, so be honest about your information.

3. Create a FSA ID, either as you’re filling out your information or before you start a new FAFSA. This ID helps you enter into your account and access your personal information. It also lets you access other Federal Student Aid Web sites such as FAFSA on the Web.

4. After you complete and submit your application, you will receive an email that your FAFSA is being processed.

5. You will receive an email notice that your FAFSA was processed.

6. Log back into your account to view your offered loan amount.

7. Accept your award letter within the specified time set by your school.

If you have other questions or concerns regarding the process, click here.

Banks

Wells Fargo and Bank of America carry private loans for students that need further financial aid. Other, smaller banks may offer students loans with high interest rates. To qualify for a loan, students need to provide the information for credit checks. Failure to do so may result in rejection or limited amount of aid.

How to apply:

1. Start and complete an online application.

2. Electronically sign all documents.

3. Track your application process and make sure everything’s running smoothly.

4. Once complete, your funds will be transferred to your school to cover any needs. Any remaining money will then be transferred to you.

Credit Unions

Credit unions work like and with community banks to help those in need of college financial assistance. These unions can be found locally. Credit unions are customer-owned nonprofit organizations so their privacy and personal interests equal your own. A major benefit of these union loans is that most are designed to be paid off in a short amount of time. This is helpful when interest rates are applied because rates will be lower, loans will be smaller, and you won’t feel overwhelmed to pay back a large amount.

How to apply:

1. Find a credit union near you.

2. Sign up and become a member.

3. Apply for a loan by requesting a credit check or bringing a cosigner into the application process.

Student loans are a great help to those in need of money and a smart way of learning how to handle finances. Just remember to only borrow what you need so you’re not stuck later with a larger amount of debt than you needed to be.

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