If you are shopping around for a student loan, there are a few things you’ll want to know. You’ll want to know what you are qualified to receive, whether or not you are eligible for a private loan, and how private loans work. When going through this process, don’t be afraid to ask questions about refinancing, forbearance, and interest rates. You’ll want to be sure of your lender and what their expectations may be. Common places to find student loans are federal student aid, banks, credit unions, and online lenders.
Federal Student Aid
Once you’ve completed your FAFSA (Free Application For Student Aid) application and have been approved to receive funds, you’ll likely be given the option to take advantage of direct subsidized or unsubsidized loans. Direct subsidized loans are loans that the government pays interest on while you are in school. Direct unsubsidized loans begin packing on the interest as soon as the loan is taken out. The great thing about federal aid is that they are flexible and willing to work with you on payments. They can even give a forbearance for a period of time if you need it. However, the interest will rise and you will likely end up paying more, but if you find yourself in hard times it can provide a handy break. There are also opportunities for loan forgiveness.
If you find that you do not have enough money with federal aid or you would prefer to do business with a private party, then you do have options. You will need to be prepared to go through a credit check, and you may need to have someone who would be willing cosign for you. If you are working, then you will need to provide proof of income so that they can determine what they will let you borrow. Private lenders are found through banks, credit unions, and even online. The key when searching is to find lenders with the lowest interest rates and ones that will be flexible and even offer you forbearance or refinancing options if you should need them. If you can find a lender that will consolidate your loans, that’s even better.
When looking for loans, find a site that can easily help you look at all of your options. It’s convenient, you won’t have to put in a lot of time finding everything, and you may come upon something you would have likely missed if you hadn’t looked. Credible is a helpful source as it lays out all of your options for private student loans and helps you find the lowest interest rates and flexible payment options.
Student loans can offer you a sense of security while you’re in school. Make sure that you only borrow what you need, and think ahead about your future career. You have options; you do not have to choose the bank your parents go to for a private loan. Look around and find what is best for you.