Meeting the financial demands of college is a struggle for numerous students. Unless their parents have managed to save a significant amount of money or earn substantial salaries, many students necessarily need financial help for education. While grant and scholarship funds have limits, borrowing money may become the sole option to make higher education financially viable.
Obtaining a student loan from the federal government involves completing your Free Application for Federal Student Aid (FAFSA). Continue reading to find the best way to get a student loan.
Federal Student Loan: How to obtain it?
To access federal student loans - the best financial aid service, you must complete the FAFSA form. This process is free and becomes available every October. Fill out the form in the year preceding your intended school attendance, and remember to submit a new FAFSA form each subsequent school year.
Steps for federal student loan application:
1. Complete the FAFSA Form
Prior to applying for a federal student loan, you must establish a Federal Student Aid (FSA) account to successfully complete the online FAFSA. Depending on your shared financial information, your college’s financial aid office will approve your loan amount. The financial aid will be offered to you in the form of grants, scholarships, or the best student loan programs.
2. Compare Financial Aid Offers
If you're a new freshman or transfer student, chances are you've applied to multiple colleges. Consequently, you'll receive financial aid award letters from each institution. Take the time to carefully review and compare the best student loans for college offers, which encompass federal student loans, to make an informed decision on which school to attend.
3. Respond to Award Letters
The award letter will furnish instructions on how to proceed in response to the offer. It's important to understand that the student loan portion of the offer represents the maximum amount you are eligible for, but you are not obligated to accept the full sum.
4. Sign the Loan Contract
Upon accepting your loan offer, finalize the process by electronically signing the agreement.
5. Attend the Entrance Counseling Session
For those receiving a direct loan for the first time, the Department of Education mandates the completion of a 30-minute entrance counseling session, which can be conveniently done online.
Private Student Loan: How to obtain it?
Private student loans are often less attractive compared to federal loans due to the absence of loan forgiveness programs, generally higher interest rates, and infrequent availability of income-driven repayment plans. Should you reach the maximum limits on your federal loans and need financial help for education, exploring the option of applying for a private student loan becomes a consideration.
Steps for private student loan application:
1. Review your Credit Score
Lenders providing the best student loans for international students typically require a credit score in the upper 600s or higher for loan approval. Therefore, reviewing your credit score beforehand can give you an indication of your likelihood of approval.
2. Prequalify With Multiple Lenders
Many private student loan providers offer pre-qualification, enabling you to receive a rate quote without affecting your credit through a hard inquiry. Go through this process with multiple lenders to compare interest rates, repayment terms, and other features side by side. Comparing quotes can help you obtain one of the best student loan programs.
3. Choose a Trusted Lender
Select a lender and initiate the application process. After identifying the lender that provides the most favorable terms for your requirements, apply directly through its website. Typically, you'll be required to furnish basic information about yourself, details about your college, your degree program, and the amount you wish to borrow.
4. Evaluate the Offer
Evaluate and acknowledge the loan offer. Upon approval, the lender will present you with an offer determined by your creditworthiness - the terms may or may not align with the initial quote you received during prequalification. If you agree to the terms, electronically sign the contract, and the lender will disburse the funds directly to your college.
Final Words
For those eligible for federal student loans, the terms, encompassing the interest rate, loan fee, and repayment period, are standardized. This implies that everyone meeting the qualifications for a particular type of federal loan receives identical terms. Conversely, the terms and features of private student loans can diverge considerably depending on the lender. Require assistance in identifying the best student loans for college and financial aid options? Reach out to College Aid Smart!
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