Student Loans-Once you have your college admission form, then the needy students might be looking for a scholarship or a student loan that will help finance their study. In this process, they first have to find a scholarship or to search for an organization to apply for a student loan.
As a new person applying for the student loan, they will have to follow certain steps to ascertain that the entire application process will be hassle-free. A survey that was conducted by The College Board revealed that annual fees at a public college equate to $9,410 while annual fees in a private college equate to $32,410. This makes college fees unaffordable to most people hence the need to apply for it.
Below, we have provided you with a comprehensive systematic guide on how you can successfully apply for loans. This will guarantee that you have enough finances to sustain you in tough college life.
Steps to follow when applying for a student loan
#1 Let student loans be your last option
Before you decide to apply for a student loan, you should first make sure that there is no other form of financial aid that you can access. Other than student loans, the most common way that students get to pay their college fees is through:
#2 Scholarships – A student will not have to pay the scholarship money back as is the case with student loans. Scholarships are gotten through academic or athletic achievements. You can search the internet to try to apply for the many scholarship opportunities that are available.
One can get scholarship opportunities from,
- Nonprofit organizations
- Private businesses
- Professional institutions
- Any other willing individual or establishment
#3 Grants – grants are also another way that students can get to fund their college funds. One does not have to repay grants, which is the same case with scholarships. One can get grants through the following:
- Federal grants
- Grants from the tertiary institution
- State grants
- Local grants from NGOs, private businesses, philanthropists and for-profit institutions
- Work-study programs – this is a program where one gets a part-time job that will help pay for their college fees and other expenses.
All the above means of financial aid will help to ensure that you are able to take care of finances in college. It also reduces the need for a student to get a loan.
#4 Look at different options
There are two ways that a person can get student loans. They can get them through the federal government and private student loans. These two options ensure that a student gets financial help that will them pay for their college expenses. Federal student loans are the ones that are gotten from the department of education while private student loans are those that are gotten from online lenders, credit unions, and banks.
#5 Description of federal student loans
Federal student loans are those that are given by the government and in relation to other types if student loans, these have low-interest rates. They also have better and flexible repayment terms. There are two types of federal student loans and these include:
- Direct subsidized loans – this is given to an undergraduate student who shows the need for financial help. In these loans, the government will pay the interest that the loan has accrued while you are still in school and for six months after graduation.
- Direct unsubsidized loans – these are given to any student without evaluating their need for financial aid. In these loans, the student pays the loan together with all the interest that the loan has accrued.
It is advisable that you go for a federal student loan as your first option. This is because these loans have a relatively low-interest rate. Congress sets the rates and the student has protection and other benefits that will aid their loan repayment. Research is paramount before deciding on whether to go for private student loans or federal loans. The great thing about federal student loans is that they have a grace period of six months. This is the time after graduation that you are expected to look for a job and start repaying your loan. Once you get a job, you can apply for a repayment plan and you can select a monthly bill that you can comfortably pay.
#6 Description of private student loan
If the money that you get from federal loans is not enough, you can opt to go for private loans. These can be gotten from banks and other financial institutions and they have interest rates that are relatively higher. One of the cons of these loans is that you may be required to start repaying while you are still in school.