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.
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.
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.
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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