When you make a purchase through our links, Insider may receive an affiliate commission. Learn more.
- You will apply for a federal loan from the FAFSA and a private loan from the lender’s website.
- The FAFSA takes about an hour to complete, while private applications can take just a few minutes.
- You will need a credit check to get a private loan and get a Direct PLUS loan from the government.
- Learn more about obtaining or refinancing a student loan with CommonBond “
If you need help paying for your college tuition and haven’t received enough money in scholarships or work and study programs, you may need to get a student loan to cover your tuition costs.
Obtaining a student loan is a fairly straightforward process. You will apply for a loan through federal or private lenderand then wait for the funds to be transferred to your school.
How to get a federal student loan
To determine your eligibility for federal student loans, you must complete the Free Application for Federal Student Aid or FAFSA. You will need to meet the federal, state, and college deadlines annually for assistance, so make sure you are up to date with the current deadlines.
Will you fill it in online form, This can take up to an hour and you need the following information:
- Federal tax returns, W-2 forms, and other records of the money you make.
- Bank statements and investment records (if applicable)
- Tax-Free Income Records
- Federal Student Aid Card
- If you are not a US citizen, your alien registration number
About one to three weeks after filing the FAFSA application, you will receive a financial assistance package, which may include grants, scholarships, work and study programs, and loans. It’s probably a good idea to fill out the form even if you don’t think you are eligible for financial assistance, as you never know what you might be eligible for if you don’t apply.
If you have the opportunity, you will want to take subsidized loan over unsubsidized loan… Subsidized loans are based on financial needs and the government pays interest on your loan while you are in school. Financial needs are not taken into account in unsubsidized loans, and interest begins to accrue immediately. Both subsidized and unsubsidized loans have the same interest rate, which is set at 3.73% for the 2021-22 academic year.
You will not need a credit check with federal loans except Direct loan PLUS, which is rented to the parents of undergraduate students, as well as undergraduate and graduate students. This loan is not based on financial needs and has a higher interest rate than subsidized or unsubsidized loans.
You will need to sign Main bill if you decide to take a loan. An MPN is a legal document that you sign to promise to repay a loan along with interest and fees. You will also determine the amount of money you want to borrow and the maturity date. The government will not pay off your loan until you sign this document.
You can usually expect your school to receive your federal funds about 10 days before class starts. You may face a 30-day delay if you are a first-year student and a first-time borrower.
How to get a private student loan
Private student loans often have higher interest rates and less protection for borrowers than federal student loans, but you may need to take them if your federal options do not cover your school’s costs.
You can find various private student loan applications on lender websites. You will likely need to provide the same financial and identification documents as with the FAFSA, although the requirements will depend on the lender.
Private lenders will conduct a credit check to find out if you are eligible for a loan, just like the federal government does Direct PLUS loans. Discuss the details with your specific lender.
You can apply for a private student loan much faster than a federal student loan. You can find out your rates and see if you are approved for a loan within minutes at some companies, and most companies will give you an approval decision within 15 minutes.
If you would like to know the status of your loan repayment, you can usually check the lender’s online portal or call customer service. You will need to agree to the same terms as MPN and sign a binding document.
Once you officially accept the loan, your college will most likely receive funds from a private lender within two to 10 weeks. You will receive funds in your personal bank account if you take a loan directed directly to a consumer, and your school’s financial aid office will receive money if you take a school-certified loan.
Obtaining a student loan is a relatively painless process, but you may have to wait a bit after accepting the loan to see how the funds are transferred to your account.