Where to Apply for a Student Loan and Not Get Screwed

where to apply for a student loan

Where to Apply for a Student Loan

When you’re getting ready to graduate high school, you’re bombarded with information about why you should go to college. They tell you about how it will increase your career prospects. They say it will help you meet new people. Of course, college will help you learn a whole lot about your subject and yourself, too. But no one really tells you where to apply for a student loan.where to apply for a student loan

While you’re thinking about which school to go to and what subject to study, you also need to consider how you’ll finance your studies.

Doing it the wrong way could leave you with a mountain of debt. The total amount of student loan debt in the USA is currently $1.44 trillion. Of course, you’ll want to contribute to that as little as possible.

In this article, we’ll tell you where to apply for a student loan the smart way.

Federal Loans

Federal loans are the most popular type of student loans.

This is due to their low interest rates and manageable payment plans. So, when you’re looking for where to apply for student loans, this will be the first option you come across.

The US Department of Education determines the amount you can borrow, as well as any grants you may receive. They are calculated on the basis of your household income. They also consider whether you’ll be studying full-time or part-time.

In order to apply for a federal student loan, you need to submit a FAFSA or a Free Application for Federal Student Aid.where to apply for a student loan

A Direct Subsidized Loan

A direct subsidized loan, otherwise known as a Stafford loan, is the least expensive type of federal loan.

In order to be eligible to receive one, you need to be able to demonstrate your need for financial aid.

Borrowing limits are $3,500 for the first year. They are $4,500 for the second year, and $5,000 for the third year — as well as any additional years after that.

An Unsubsidized Stafford Loan

This type of loan doesn’t require you to provide any proof of financial need.

In your first year of study, you can borrow up to $9,500. However, this goes up to $20,500 for postgraduate students.

The interest rate is fixed at 6.8%. You don’t have to start repaying the loan until 6 months after you graduate due to their grace period.

You can defer your repayments even further after that if you need to. However, it’s important to note that interest will still add to the total amount you owe.

A Perkins Loan

With this loan, you can borrow anywhere between $5,500 and $8,500 a year. The amount depends on your year of study and your level of financial need. For this reason, you need to provide evidence of this is your application.where to apply for a student loan

The largest amount you can borrow is $60,000 and the interest rate for this loan fixed at 5%.

Perkins Loans are only offered through certain schools. So, always check that the institution you’re applying to partners with the program before applying.

A Federal Direct PLUS Loan

If your parents are willing to help you pay for your college education, a Federal Direct PLUS loan is a great way for them to do that.

This type of loan isn’t available to everyone. You must have an adequate credit score. You can borrow anything up to the total amount of your school fees, minus any other financial aid you receive.

The current interest rate for these loans is 7%.

You can choose a repayment plan that suits you, with options ranging from 10 to 25 years.

Private Student Loans

The second option you’ll find when researching where to apply for a student loan is private lenders. Here are the best ones out there.

Sallie Mae

Sallie Mae offers student finance for undergraduates, graduates and parents. It also lets you defer your loans if you go back to school at least part time.where to apply for a student loan

They also allow you to borrow money to cover extra expenses not included in many other student loans. This can include things like bar exam fees and private schooling for students with children.

You need a cosigner to qualify for a loan with Sallie Mae. However, you are able to release them either after graduation, after you’ve built a strong credit history, or after making consistent payments for one year.

If you find yourself unable to repay your loan due to financial or medical problems, Sallie Mae provides forbearance periods of three months at a time for up to 12 months in total.

Citizens Bank

In order to qualify for a student loan with Citizens Bank, you must have a credit score of 620 and an annual income of at least $12,000.

With Citizens Bank, you have the option to repay your loan within 5, 10 or 15 years.

In order to get a head start on your repayments, you can do interest-only repayments while you’re still studying. That way, there’s a lower overall amount yo pay after you graduate.



Discover

The best thing about Discover is that unlike other lenders, they have absolutely no fees for origination, late payment, or insufficient funds.

They also provide 1% cash back for students who achieve GPA of 3.0 or above every term.

To qualify for a loan with Discover, all you need is a credit score of 660. If you don’t have that, you just need a cosigner who does.



Find Out What You’re Eligible For

The current average student’s debt is more than $37,000. However, if you do you research and choose the best student finance provider and repayment plan for you, can reduce yours as much as possible.

If you’re applying to university in order pursue a career in teaching, you might be able to get rid of it entirely.where to apply for a student loan5

Teachers are often eligible for student loan forgiveness. This means that much of the amount you borrow could be completely wiped out once you start teaching, leaving you free from student debt.

However, those of us who study other subjects aren’t so lucky. We have to adhere to stringent requirements when searching for where to apply for a student loan.

Many types of student loans require you to have a certain credit score.

If yours isn’t high enough, there are ways you can improve it. See our post on how to build credit fast with no credit history to improve your chances of qualifying for a student loan.

 

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