How to Apply for Student Loans
Student loans are the precursor to higher education. Regardless of whether you hate the thought of borrowing money or not, student loans are a big part of your future’s investment. Loans are the foundation that literally make your education possible. Here are the basics on student loans and how to apply for them.
Student loans should be considered unique since they offer a few key features. First of all, almost any student may borrow money, regardless of their credit history or income. Also, student loans offer very low interest rates and the ones that the government offers through different programs are the most attractive overall.
Don’t borrow money if possible.
If there’s any way possible, try not to borrow the money to go to school. While it’s easy to get the funding now, it won’t be that easy to pay it off down the road. An education is a great investment but if there’s some way to avoid taking out a loan (perhaps a gift from a loved one), go for it and say ‘thank you’.
Generally, a student loan covers tuitions, books, fees, direct educational expenses, and commuting costs. Here are the step-by-step directions on how to apply for a student loan:
1. Fill Out the FAFSA Application
First, fill out the FAFSA (Free Application for Federal Aid) form. All the information you submit on the form will help determine your eligibility for a direct loan. A direct loan is awarded via the U.S. Department of Education rather than a private lender and generally has easy flexible payment terms and low interest.
2. Your Financial Aid Offer
Before you get ahead of yourself, wait on your offer for financial aid. Once you’re told how much money you’ll be receiving in scholarships, grants, and other kinds of financial aid, then you can decide how much money you actually need to borrow in order to pay for the rest of your education expenses. Your offer will primarily include key information on how much you’re allowed to borrow regarding direct unsubsidized and subsidized loans. This total amount is based on your dependency status, grade level, and other important factors as well.
3. Entrance Counselling
If you’ve never received a student loan before, it’s necessary to complete what’s known as an entrance counselling program that’s designed to help you understand the loan’s terms along with your liability as the borrower. Some schools offer entrance counselling programs or you may be able to complete one online.
4. Seek a Private Lender
You may need to find a private lender if you still don’t have enough funding for your education after receiving grants, scholarships, and a direct loan. There are many private lenders available to obtain a student loan. Try to look for more than just one private lender if possible so that you can compare various loan terms and interest rates before signing the paperwork. In the long run, it pays to shop multiple lenders.
5. Fill Out a Master Promissory Note
You need to fill out a master promissory note, MPN. The MPN is provided by the Department of Education or your chosen school. Filling out the note is the same as promising to pay back the entire amount of cash you borrow. Check with your particular school to determine if it’s possible to fill out the MPN on the Internet.
6. Signing the Contract
After finding the ideal lender and deciding exactly how much money you need to borrow, it’s time to sign the loan contract. By signing the actual loan contract, it means you agree to the repayment terms as well as the loan itself.
After you complete your educational requirements, get ready to pay back those loans. Quite often, your financial lender will prepare an amortizing repayment schedule on your behalf. If you’ve borrowed a number of loans throughout the years, it may be in your best interest to consolidate all your loans. Fortunately, student loan consolidation offers a few special benefits that other conventional loans don’t offer.