How To Apply For A College Loan: 4 Proven Steps To A Quality Education

student piggy bank and calculator used to find out how to apply for a college loan

4 Ways On How To Apply For A College Loan

Are you thinking about higher education and wondering how to apply for a college loan? Did you know the costs of college tuition ranged from $9,000 to over $33,000 for the 2016-2017 academic year? With the costs increasing each year, applying for university loans may be your best option at a secondary education.

student applying for a student loan online

Are you looking for the best tips to apply for university loans? Keep reading to find the best ways to secure the money and get into the school of your dreams.

Apply for Federal Loans First

Once you know how to apply for a college loan, going the federal route is a smart first option. Federal loans will come with a fixed interest rate, so you know exactly how much you will be paying for the duration of the loan.

If you go the private lending route your interest rates can fluctuate. In addition, there are limited repayment options at your disposal.

Know Your Repayment Options

Most standard loan repayments are based on a 10-year repayment plan. However, the standard monthly payment may be out of your budget. What’s the best option? It might be to restructure the repayment plan altogether.

This does come with higher interest rates, so consider this when looking at your long-term financial prospects.

knowledge is power written on black board

Another repayment option is to apply for an Income-Based Repayment plan, also known as an IBR. An IBR is a great way to reduce the cost of your monthly payments, however, loans from private lenders are not eligible for this option.

You can also consider refinancing your university loan, and we have the tips to make that happen!

Don’t Wait to Graduate to Make Payments

When you think of paying off your loans you envision yourself graduating before having to pay a dime right? While in theory that may be the case it doesn’t hurt to make payments as soon as you can.

Finding a way to fit a part-time job into your schedule can be a great way to lessen your financial burden as you pay off your loan.

Paying off the interest as soon as possible will be the priority, as that will keep it from growing over time.

Ignoring Your University Loan Payments Can Have Huge Consequences

For federal university loans, you have a period of 9 months before it becomes a defaulted loan. Once a loan enters default status you must pay off the entire amount as soon as possible.

student worrying

The status also can destroy your credit score, and your income tax refund may be held by the government if you are eligible to receive one.

Private loans have their own time period before a loan enters default status, so make sure you carefully read all of the terms and conditions before signing one.

Making the Right Choice for You

At the end of the day, you want to make sure that you are selecting loan providers that you are comfortable with. Knowing the terms of the loans and the repayment options available should be the first steps of research when looking for a loan provider.

Have these tips answered your questions about university loans? Comment below and don’t forget to subscribe to our newsletter!

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  1. I only wish I had known this when I went off to college for the first time. This information could’ve helped me and my family save so much money. In fact, I’m still paying back on college loans and I graduated 7 years ago.

    • Seems to be a common story these days. Students pick a career but don’t understand the true costs involved when they get a student loan. Lucky for students just starting out there is tons more information on the Web to help them out.

      Take heart, you can apply some of these same principles to other common debt problems, like buying a car or house.

      Thanks for commenting.

      All the best.

  2. Waiting to graduate before making payments was the biggest mistake I made. 

    I love this article and will be sure to share it with everyone on social media.

    Those college tuition numbers ranging from $9000 to over $30,000 are quite staggering.  To get a good education, most folks are going to require some sort of college loan.  

    The school year is almost out where I live and a lot of high school students are making that big transition to go to college. From the article it appears that Federal loans are the first to look.

    I’m sure they will find this information extremely helpful. 

    Great article.

    • Hi James,

      Not everyone can begin to make payments before they graduate, but if you can it’s wise to start.

      There are work study programs at many universities and students can always pickup a part time job.

      Extra money from those efforts could be applied to a college loan.

      The best advice I can give to students that want a college degree is to have a look at Federal financing. 

      Qualifying for Stafford and Plus Federal loans is much easier than private student loans.

      College tuition costs will continue to rise, so students looking to the future should consider all their options.  

      Those options include applying for grants, college loans, part time work and where possible help from family and friends.

      Thanks for your comments

  3. Hei Patrick,

    This is a very informative article for anyone planning to head off to a university.

    I cannot agree with you more on your point about not delaying paying the loan back, as unfortunately the power of compounding interest working against you can see outstanding loans escalate quite quickly. 

    It is unfortunate that students have to pay so dearly for their education in the US, where I am living in Finland it is completely free.

    • Hei Tony,

      Thanks for your comments. 

      Yes it’s unfortunate that US students have to take out loans for their college educations. There are lots of opinions why, but no real agreement on how to fix it.

      Large university budgets require high tuition rates and in turn force students to apply for a college loan in order finance it.

      I not convinced that a free college degree is the way to go. Someone has to pay either through taxes or out of their own pocket.  Like everything in life we all need to have some skin in the game.

      To keep costs down, I would recommend that students look within their own states or attend less expensive regional colleges, so that they don’t pile up large amounts of student debt. Even having a part time job while in school can lessen the financial burden.

      All the best.

  4. As a college student, I can tell you how important the stuff you’ve said is.

    I’m a finance major, and everything I’m studying has to do with responsible money management.

    The idea of paying loans off as you’re going through school helps immensely, and actually means you pay less money in the long run, because of the ridiculous interest rates.

    Great article!

    • Thanks Ian,

      Nice to hear they are teaching responsible money management in business school.  What a concept.

      Hopefully some of these ground breaking ideas will help your fellow fiance majors make exceptional money decisions in the future.

      I’m extremely pleased that you get the idea that paying early, pays off.   Making payments on a college loan while still in school saves interest and can put you on firm financial ground when you begin your professional career.

      All the best in your future endeavors.

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