Are you thinking of how you're going to finance your college education? Like millions of other American students, loans are a way to pay for tuition and living expenses while in school.
By applying for a student loan, you will be able to pay for your studies + other expenses now and pay off the loan later. All you need is the right application form and certain documents.
With your documents and qualifications, you can opt for either a federal or private loan. Whichever one works best depends on your circumstances.
To learn more about applying for a student loan, keep reading!
As a loan applicant, you can opt for one of two types of student loans. You can choose a federal loan or a private loan. So what is the difference?
A federal loan is issued by the US government. Federal student loans are either subsidized or unsubsidized. Public funds provide much of the funding for these loans. For this reason, approval can be faster and easier for most applicants. The benefits of a federal loan may trump those of private loans.
A federal loan does not require you to have a previous credit score or history. On paper, you can apply fresh after graduating high school! Also, in light of recent developments, federally issued loans of any kind can be deferred and are subject to forbearance or forgiveness.
Private loans do the same thing as federal student loans. They pay for your college education now, and you can pay them back later. That aside, the following distinguishes them from federally funded loans.
First, companies or private financial institutions like banks lend the student loans. So, you can expect some differences in the qualifications, requirements, and eligibility criteria.
Second, private student loans do not receive the same level of consumer protection. In other words, you may have a harder time these days applying for forbearance or deferment.
Lastly, unlike federal loans, private student loans will require a credit or tax history. Without these, getting approval can be challenging for fresh high school graduates.
You may apply for either or both.
Be that as it may, chances are high that:
If this is the case, the obvious choice is to apply for a federal loan. If you believe you would be better off with a private loan, you can apply for one of those as well. Once again, just be aware that a private loan will require tax and credit history in most cases.
You can create an FSA ID through the Federal Student Aid website. You will receive a password and a username. You will need your Federal Student Aid ID to submit documents like your Free Application for Student Aid form.
This won't take too much time. As you complete the form, have your documents ready so that the information you include will be accurate. As you send this form, your Federal Student Aid ID will be used to identify you.
You will need the following documents:
In the Free Application for Student Aid Form, you can include five to ten schools of your choice. Each school will have a code. You can find them here.
Only proceed to this step if you are unable to get approved for federal aid or do not want federal aid.
As mentioned earlier, you will need a credit and tax history. For this reason, the following will be especially crucial to your application:
If you lack these (and you probably do), proceed to the next step.
A co-signer is someone who can meet the tax and credit eligibility requirements.
Your parents can be your co-signers. But co-signers can also be:
There is a caveat; the responsibility of paying the loan falls not just on you but your co-signer as well.
Issued by the government or a bank, a student loan can finance you for up to four years of college. Keep in mind that you will be applying for a loan. So, as you fill out the application, think about how you will be able to make payments post-graduation. In the meantime, get financed and make it count!