Education is very important but unfortunately, it comes with an
expensive price tag. But do not fear, student loans are readily
available to help you breeze through college without having the pressure
of coming up with the money needed as enrollment time comes.
The
thing with student loans is that unlike scholarships and tuition grants,
loans are supposed to be paid in full at the end of the term plus
interest incurred. Generally, it will take a college student 10 years to
fully pay the loan he took out to finance his college education.
If
you are thinking of getting a student loan then read along as we answer
some of the frequently asked questions when it comes to applying for a
student loan.
What do I need to apply for a student loan?
In applying for a student loan, you need to keep in mind three important elements:
First:
the timeline for applying - keep track of the deadlines that you need
to meet in your application to avoid any hassles and delays on your
part.
Second: research on the documents that you need to have in applying for a loan.
Lastly,
there is such a thing as student loan reports which states the status
of your student loan, the award letter and expected family contribution.
What are the documents needed in applying for a student loan?
In
applying for a student loan you need to present several documents in
order for your application to be processed. Here are some important
documents that you need to present:
- W-2 Forms and other records of your personal income
- Copy of your federal income tax return
- Bank statements
- Proof of investment (stocks, bonds and other investment instruments) and other mortgage information
- Social Security Number
If you are a minor, you also need to present your parent's federal income tax return or Form 1040.
What are the different types of student loans?
There are different types of student loans that you can avail, here are some of them:
- Federal State Loans - The Federal Family Education Loan Program provides American families additional financial aid which is funded by the federal government. Students applying under this type of loan are automatically considered in the program. This type of student loan has a very low interest rate and flexible payment plans.
- Private Student Loans - are usually offered by banking institutions such as Bank of America and Wells Fargo. This type of loan provides students to fill the difference between their tuition fee and the federal state loan grant. This type of loan requires the borrower and co-borrowers to have a good credit standing. This is to improve the financial standing of the student which he can use to buy books, computers and room and boarding expenses.
- Institutional Student Loans - usually offered by the university that you are enrolled in. You can contact your financial aid department for more information.
More tips that student loan applicants can use
- If you are the parent, it's best to invest in a college savings plan early on.
- If you're a student, apply for financial grants and scholarships because these are non-interest bearing financial instruments.
- Make sure that you understand every clause and terms of your loan before you agree to it.
- Never miss payments, if you have no choice but to do so, ask help from your parents.
Applying For a Student Loan All You Need to Know Before You Apply
![Applying For a Student Loan All You Need to Know Before You Apply]()
Reviewed by SATYATARUNA WOTAN
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