Acquiring college financing should be a lot easier if you know your options and the right steps of filing your application. In this article, we will discuss the procedure on how to apply for the best student loans.
Applying for A Federal Student Loan
To apply for a Federal loan, you need to fill out your FAFSA or Free Application for Federal Student Aid. You can get your FAFSA online at www.fafsa.ed.gov. Carefully provide the required information to know which Federal Loan you can qualify for.
Generally, there are three types of loans provided by the government – the Perkins Loan, the Stafford Federal Loan, and the Family PLUS Loan. The Perkins Federal Loan are for students with limited financial capacity since it has the lowest interest rate fixed at 5%.
The Stafford Federal Loan is further divided in two subcategories- the subsidized and non-subsidized Stafford loans. Both have a fixed interest rate of 6.8% but only the interest fees of a subsidized loan will be paid by the government. A non-subsidized Stafford Loan subjects the borrower to pay for the whole entire loan plus interest. Nevertheless, at only 6.8%, it is considered to be more affordable than Private Loans.
Lastly, Family PLUS loans are available for parents of undergraduates and dependent students. The Parent PLUS loan do not require an income bracket in order to qualify. However, the applicant must be able to have good credit history to get approved. For parents with bad credit history or a record of bankruptcy, they will be disqualified from obtaining this Federal Loan.
Applying for A Private Student Loan
Many lending companies require good credit history for those who want to get a private student loan. Students with no credit history will need to be co-signed or backed-up by a parent or guardian who enjoys good credit standing. Nevertheless, aside from credit check, private lenders have more lenient standards in reviewing applications.
There are many choices of lending companies that offer student loans. You can even find several lenders who are willing to extend loans even for those with bad credit. However, as can be expected bad credit student loans will have higher interest rates and fees than loans that require good credit.
Anyone can apply for a private student loan online but it is very important to do extensive research first before choosing a lender. Carefully examine your loan Agreement to ensure that all the Terms and Conditions are fair and legal.
About the Author
Samantha Wilson is a consultant for managing credit cards and finding the best student loans. For years she has written student credit card articles that helps build student credit, and student loan help articles that can be used as guides to handle student loan debt.