Process of Getting a Private Student Loan and Federal Student Loan

The process of getting a private student loan versus a federal student loan is different. It is important that you understand both ways to get a loan regardless of the lender you choose.

Process of Getting a Private Student Loan

People try to apply for federal student loan assistance but sometimes they may get declined or not get enough coverage. Either way now you need to look at the other option you have of a private student loan. You can get a private student loan from a variety of different lenders like banks, credit unions, and online lenders. One of the most important steps with this is research! You want to look at the different lenders, the repayment options, penalties, flexibility, rewards, loan length, and more. You can even check with your school to see if they have any recommendations for you as to where you should get your private student loan. Now that you know where you want to get your loan from, you need to make sure you apply with enough time. You don’t want to wait until tuition is owed because you may miss your first payment due to the processing time it takes to actually get your loan. In fact, it can take months to actually get the funds you need so make sure to do this sooner rather than later. While not every bank is the same in regards to the type of documentation they need, there are a few that you should have on hand just in case. You will want to have proof of income, references, and know your social security number. This loan application is a hard inquiry not a soft one so if your credit score isn’t great you may need help from a cosigner.

Process of Getting a Federal Student Loan

The first and most important step of getting a federal student loan is to fill out a Free Application for Federal Student Aid (FAFSA). Once you fill out this form and submit it, then you will get a financial aid offer from your school based on your criteria. However, you may not be eligible to receive any type of assistance either. The assistance aid offer that you received will be your federal student loan and the cost of the loan is determined on the criteria of the form you filled out. Once approved you will likely go into entrance counseling. Entrance counseling is a free meeting that helps students understand their loan from what the amount is for and repayment obligations. Once you finish entrance counseling then you will need to sign a Master Promissory Note which officially dictates that you understand and agree to the terms of the loan. If you have any type of question about your financial assistance, then you can speak to the financial aid office of your school for help.

Overall

Regardless of the type of loan you get, it is important that your education doesn’t break the bank. First try to see if you will get any type of federal assistance but if not then you can look into private lenders. You should also look into educational grants because it is money that you do not have to pay back that can go towards education costs!