There is a type of financial aid called student loans that can help pay for college. Students can get loans from both the federal government and private companies. Many of these loans need to be paid back over time with interest. How much help you get relies on a number of things, including your expected family contribution (EFC), your ability to get funds and awards, and your own personal financial situation.
Even though it might seem hard, there are things you can do to make the process go more smoothly. Before you apply, make sure you have all the papers you need and know how the loans work.
First, fill out the FAFSA, which stands for the Free Application for Federal Student Aid. This will let you know if you are eligible for both government and private student loans, so you can look at the different loan choices you have.
You’ll get a letter telling you how much financial help you’re eligible for after you fill out the FAFSA. This money can be used for tuition and other education-related costs like books, room and board. Additionally, your loan servicer will manage your loan once it has been disbursed and make payments on your behalf.
Once you’ve identified which loan type is suitable for your situation, you must choose a repayment plan. There are both standard and graduated plans available; select whichever makes the most sense in light of your individual circumstances.
Federal loans typically have a 10-year repayment schedule, though lenders can set up any length or frequency of payments for you. You also have the option to change your repayment plan if you’re having difficulty making payments.
When applying for private student loans, you’ll need to select a repayment plan. Some lenders offer fixed-rate options while others provide variable rates. If you select the former option, then your monthly payment will remain the same until your loan is fully repaid.
Some lenders can assist you in finding a cosigner for your student loan. This could be someone like a friend or parent with good credit who will stand behind you and contribute income and assets, helping you qualify for more affordable loans since your own credit score may not be as strong yet.
Once you’ve identified which student loans are ideal for you, it’s time to apply. Utilizing your FAFSA and financial aid award letter as guides, fill out the appropriate loan application and submit any required documentation.
Remember, your student loan will affect your credit history, so be sure to make all payments on time in order to preserve it for future education or other important purchases. A positive credit history can give you a competitive edge when buying a car, home or other large-ticket item.