Process of Getting a Federal and Private Student Loan
After reading about the difference between a federal student loan and a private student loan, you have the solid foundation to choose which one would be best for you and your lifestyle/budget! This article is going to highlight the process of getting a student loan whether you opt in for federal or private:
Process of Getting a Federal Student Loan
The first step in getting a federal school loan is to fill out a Free Application for Federal Student Aid (FAFSA) form. Once you filled out and submitted your form, depending on the results, your school will send you a financial aid offer based on the criteria of the form. The financial aid offer may or may not include federal student loans, this is completely up to your eligibility based on the form. Once you receive an offer, your school will tell you how to accept the loan whether you want all of it or just a part of it. However, expect the school to tell you about completing entrance counseling. Entrance counseling is a tool that was implemented for students, so they understand what this loan entails, and their obligation to pay the loan back. Not only will you complete entrance counseling but you will also need to sign a Master Promissory Note which is the agreement to the terms of the loan. Any and all questions you have about the financial offer you received can be answered by speaking to the financial aid office of your school.
Process of Getting a Private Student Loan
Whether your federal student aid was not enough to cover the cost of tuition, or you were declined any financial aid from the government, or you just prefer to get a private student loan altogether, you will be faced with a bit of a different process compared to getting a federal student loan. The first step is research! You need research institutions that offer student loans and see which one best fits within your lifestyle and budget. It is also worth noting that you can check with your school and see if they have a lender list of banks/credit unions that they recommend with student loans. Once you look and compare options for a student loan, you need to choose which loan would be best for you. You now need to apply to that bank for a student loan but make sure to give yourself more than enough time. Do not wait until right when tuition is due because this can be a lengthy process that can take up to several months so you want to make sure you don't owe any payments before the loan is set up. Depending on the bank you choose, you will need to have some necessary information for the loan like your social security number, proof of income, and even sometimes references. This type of loan application is a hard inquiry, not a soft one so you will be looked at based on your credit standing and history. You may need to look into cosigner options if your credit is not up to par for the loan. The financial advisor at the bank will discuss these options to you if need be. After all of that you will see if you are approved, and if not, the financial advisor will tell you what you need in order to secure the loan.
Overall, no matter what way you choose to get your student loan, you need to ensure that you are making payments on time, and never allowing the debt to get the best of you. You will need to be on top of the loan and remain disciplined. If your student loans start getting the best of you, remain calm and make sure you read about how to get yourself out of school debt most efficiently.