How To Get A Student Loan For College
Navigating the world of loans and personal finance when you’ve got college on the horizon can be understandably intimidating.
It can be easy to jump on the first loan offer you see and miss out on the finer print. A lot of people end up paying off their student college loan when they are well into their careers, and a lot of this has to do with not getting the best student loans out the gate.
Read on to learn about the top three tips you should follow on how to get a student loan for college, no matter what university you’re attending.
1. Do Your Research
There are so many loan options for college students out there. Before you plunge into the world of lending, it’s absolutely crucial to get some solid knowledge about all the options available to you.
That means starting out by learning about interest rates, grace periods, and terms of repayment.
Watch – Federal Student Loans
Your loan, unfortunately, isn’t free. In fact, you’ll be charged an interest rate depending upon the length and amount of the loan. Also, you’ll have to pay accumulated interest in addition to the loan amount.
Ideally, you’ll want to find a college student loan with the lowest possible interest rate, so that you’ll spend less money in the long run. This should be at the top of your list when you are researching loan options.
When it comes to repayment terms, every loan will be different. Most federal loans permit a student to pay off the loan once they graduate after a certain grace period–typically six to nine months after graduation from college.
At the end of the day, check out low-interest college loans with long grace periods and flexible repayment plans. In this case, you’ll want to check out the following federal subsidized loans.
Federal Perkins Loan
This subsidized loan enables students to pay off the loan once they graduate. The government pays the interest while you are in school. Your interest rate remains fixed at five percent.
Federal Direct Subsidized Loan
This is one of the best student loans out there. It is given based on the financial needs of the applicant, and has one of the lowest fixed interest rates out there: 4.29 percent.
There is also a limit here for how much a student can take out per year.
You can take out federal loans that are not subsidized, but these often mean higher interest rates (upwards of seven percent), shorter grace periods, and interest paid during the time at school.
However, the good thing about unsubsidized loans is the fact that you can take out a loan for the entire price tag of a college education. They are not need-based.
Private Loan Options
Last but not least, there are a host of private or state loan options available to college students. Like unsubsidized federal loans, these are also not need-based and tend to have higher interest rates.
In general, we don’t recommend taking out a personal loan to pay for college, as the interest rates can be prohibitive.
2. Choose a Smart Repayment Plan
It can be very tempting to take out a loan, get the cash, and pay your tuition–without thinking about repayment. That’s way down the road; I don’t have to worry about it now.
Before you sign on the dotted line, make sure you think in terms of repayment. Envision where you might be once you graduate. Are you going to be in a position to make regular payments plus interest then?
Keep in mind that many fresh graduates don’t just walk into a job post-graduation. In this case, it’s important to explore grace periods that your loan’s terms offer and minimum monthly repayment plans.
It can be helpful to bring in a student college loan calculator here to calculate your average monthly repayment cost and how long it will take you to pay back the loan.
3. Don’t Be Afraid to Ask for Advice
At the end of the day, getting professional advice when deciding how to get a student loan for college never hurts.
Many loan counselors provide services through non-profit organizations intent on helping students navigate debt worry-free. Depending upon your needs, you’ll be able to have a conversation or series of conversations that can put you on the path toward understanding your best options.
Loan counselors will also be able to walk you through any complicated aspects of the loan process, and offer endless resources about taking out the best student college loan.
You’ll also be able to call any representative from the loan department you choose to talk about specifics and repayment plans. You may even be able to talk to your university to get a sense of best recommendations.
Don’t be shy: bring this up with your parents or close friends. Ask for their advice about repayment options, interest rates, and loans, and what they would recommend.
How to Get an Adequate Student College Loan
Getting the best possible student college loan doesn’t have to be an uphill battle. College is hard enough!
When you are gathering funds for getting through college, it’s important to really do your research. Understand all of the options available to you, including the difference between subsidized and unsubsidized student college loans. Make sure when you are assessing options that you are clear on interest rates and repayment terms.
We also recommend talking to a loan counselor or other professional if you want additional assistance in navigating student debt.
At Credit Squared, we aim to help anyone and everyone understand the complex world of personal finance. We’ve got you covered when it comes to learning about taking out loans of any kind and boosting your credit knowledge.
Want to share your personal experience about how to get a student loan for college? Leave a comment below!
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