How to Take Out Student Loans
If you’re planning on going to college, you’re probably trying to work through your strategy to pay for it. According to The College Board, one year at a public, in-state university costs $9,410, while a year at a private school costs $32,410. With such a large investment, some families may have to take out student loans to help pay for school.
Student loans can be a great option to help pay for school and earn a degree. It’s important to borrow only what you need, research your repayment options, and stay on top of your debt so it doesn’t get out of control.
In this article, you will learn how to take out student loans and how to manage your debt after graduation.
Step 1: Fill out the FAFSA
“How do I get a student loan?”
The first step in taking out student loans is completing the Free Application for Federal Student Aid (FAFSA). The FAFSA is what the federal government and universities use to determine what aid you’re eligible for, including grants and student loans.
To make sure you get all the aid you’re eligible to receive, make sure you complete the FAFSA as soon as it becomes available each year.
Not sure where to start? Check out this guide on how to complete the FAFSA in 7 easy steps.
Step 2: Maximize Scholarships and Grants
When it comes to paying for college, one of the most important things to keep in mind is to take advantage of free money. Free money, like grants and scholarships, are free to you; there’s no fee associated with them and you don’t have to pay them back. That’s one of the main differences between grants, scholarships and student loans, which have to be repaid with interest.
When you fill out the FAFSA, you’ll automatically be considered for some scholarships and grants. But you’re not limited to just those issued by the government or your selected school. You can use tools like FastWeb to search for and apply for thousands of scholarships. You can even combine multiple awards to reduce your overall college costs.
Step 3: Evaluate Federal and Private Student Loan Options
After applying for scholarships and grants, you may still need additional funds to pay for school. That’s where student loans come in.
But when figuring out how to take out loans for college, remember that there are two kinds of student loans: federal and private.
Federal student loans are issued by the government. When you receive your financial aid award letter, federal loans may be a part of your financial aid package. If you want to move forward with the suggested amount of loans, you simply need to accept the offer, and the financial aid office will guide you through next steps.
The process to get a private student loan is different, but they can be an excellent resource when you’ve exhausted your other financial aid options. Private loans are typically offered by banks and financial institutions. You apply directly through the lender and they handle disbursing the funds to the school.
If you need money to pay for school, apply for a loan through College Ave.
Step 4: Consider Your Repayment Options
Once you receive your financial aid and student loans, you need to figure out how you’ll handle repayment while you’re in school.
With federal student loans, payments are deferred while you’re in school and enrolled at least-half-time and until six months after you graduate. Depending on what type of loans you have, interest may accrue during this time, but you’re not required to make payments while in school.
Private student loans can vary from lender to lender. With some, you can choose to make payments while you’re in school or choose to defer payments, where you can delay making payments until you after graduate. Contact your lender to see what repayment options are available to you.
Whatever repayment option you choose, you might want to consider making payments while in school to reduce the overall cost of the loan.
Taking Out Student Loans
College is a significant investment. Student loans can help you cover the cost so you can earn a degree and start your career, but it’s important to only borrow what you need. By understanding your repayment options, creating a budget, and sticking to a plan, you can take out student loans responsibly and repay them without breaking your budget.
Student Loan Interest Rate vs. APR: What's the Difference?
Student loan interest rates and APRs can often be the deciding factor with which...Read Article