Regardless of where you live, the fact that college education is extremely expensive is undeniable. Unfortunately, some of the top universities in the country lock their studies behind expensive paywalls. In a sense, the better the education that you will get, the more it will cost.
While most families save up money over the course of 10-15 years in order to pay for their children’s college education, some do not have the resources to do this. When this happens, it is time to start looking at how you can get a student loan in order to pay for your college education.
This having been said, regardless of how much you feel that you need the money, it is important not to jump at the first opportunity that you get. A student loan is still a loan and a large one at that. Here is what you should do before borrowing the money that you need to advance your education:
Do the math and think about the future
You will have to repay the loan, at some point. Look at the line of work that you want to get into after finishing college and make a note of what you would earn on average. Then come up with a plan that will help you repay your student loan once you finish college.
Keep in mind that there are several types of loans to choose from and each of them has its particular advantages and disadvantages.
Getting a federal student loan
The first step towards getting a federal student loan is to submit your FAFSA or the Free Application for Federal Student Aid. This will enable you to learn what type of financial aid you qualify for. This amount is calculated depending on several factors, but it is important to keep in mind that each school that you apply will give you different figures. Furthermore, federal student loans do not have to be repaid, although they are harder to obtain than private ones.
Once you get the responses from schools, deduct the amount of money that they are willing to give you from the total cost of attendance. This will leave you with what you will have to pay out of your own pocket.
You will also have to remember that the FAFSA also serves as a federal student loan application, which means that you may qualify for a loan as well, not just the aid. When reading the financial aid award letter that you will receive, look for subsidized loans. These are regularly given to undergrads that have a financial need. The subsidy itself will cover the interest of the loan, for the time that you are in school. Alternatively, unsubsidized loans start accruing immediately.
Getting a private student loan
If you either do not qualify for a federal loan or if it is too small and would still need money to pay your attendance, consider getting a private student loan. These can be used in conjunction with scholarships, federal student loans, and grants, making them great for paying the rest of the cost of attendance.
These can all be obtained from banks, credit unions, and you may even find online lenders who offer private student loans. The fact that there are more companies and services offering these makes it easy to shop around until you find one that fits your needs and financial possibilities.
How to easily get approved for a private student loan
While federal student aids and loans are relatively easy to get, private ones are treated by creditors just as if you borrowed the money for any other purpose. In other words, you will have to have a job and earn enough money to make your monthly payments while also meeting the rest of your expenses.
Generally speaking, you have to have a low debt-to-income ratio, so that the creditors will know that you will be able to repay the loan. The second most important condition is to have a good credit score.
This having been said, if you do not meet these conditions, you can still qualify for the student loan by having a co-signer with good credit. Keep in mind that most private student loans are given to individuals that have a parent as a co-signer.
Both of these types of student loans can help pay for your education, however, you have to remember that you are essentially borrowing money that will have to be repaid. Get a federal loan, a private one, or both, but think things through and make sure that you have a strategy that will allow you to bay repay them.
Furthermore, when it comes to private student loans, do not be afraid of the system’s rigidity. Shop around and you are bound to find a service or a company that fits your needs and possibilities.