The student loan is a major financial responsibility for many students today. Whether you are going to school full time or taking online courses, your student loan will be demanding a lot of your financial resources. In order to make sure that you can manage your student loans, it’s important to know how the process works and what your options are. To help out students with this tough task, here are some tips for getting approved for your student loans.
Apply FAFSA
To apply for your student loans, you will need to fill out the Free Application for Federal Student Aid (FAFSA). This is a form that your school and the federal government use to determine how much financial aid you can receive. The FAFSA application is open all year round, so you should submit this form as soon as possible.
Apply for Private Student Loans
Private student loans are better than federal loans because they have lower interest rates and don’t require a credit check. According to Lantern by SoFi, “Many factors affect your credit scores and the interest rates you may receive.” However, you won’t have to worry about your credit check with private student loans.
Private banks and organizations can also back these loans, so if you’re struggling to make payments, the lender has more incentive to help you manage your loan. You can consider student loan refinancing after school but at a lower interest rate.
Apply for Subsidized Loan Prior to Unsubsidized
For the students enrolled in school, it’s essential to apply for loan subsidies. A student loan subsidy is a federal student loan that has been awarded to the student based on their financial need.
Generally, if you are dependent on your parents’ income, you will qualify and be eligible for subsidized loans. If you have your income, you can potentially apply for unsubsidized loans.
Unsubsidized loans require 20 percent of your salary as credit-based repayment to avoid paying interest on this loan and monthly payments to the government. The difference between the two types of loans is that there will be interest paid on the total amount borrowed, while there won’t be any interest for subsidized loans.
It’s a good idea to start with subsidized loans because they offer lower rates than unsubsidized loans.
Consider a Cosigner
One of the crucial steps of the student loan process is submitting an application to a financial institution. However, this isn’t the end of your financial burden. Before submitting your application, you should consider a cosigner for your loan.
A cosigner will be responsible for paying back their portion of the loan if you don’t meet the requirements for the loan or are unable to work at all because of illness or disability. The advantage of using a cosigner is it can provide more security while simultaneously lowering risk.
Provide proof that you are in an Eligible School
You will need to prove that you are attending or planning on attending an eligible school before getting the student loan approved. Eligible schools include any college, university, or vocational-technical school that the government legally authorizes to provide postsecondary education.
Getting a student loan is one of the best ways to go towards your future career. But with the high number of colleges, it can become overwhelming for students, which is why you must figure out the best path for you.