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- 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 apps can take as little as a few minutes.
- You will need a credit check to get a private loan and to get a Direct PLUS loan from the government.
- Learn more about obtaining or refinancing a student loan with CommonBond Â»
If you need help paying for your college education and haven’t received enough money through scholarships or co-op programs, you may need to take out a student loan to cover it. scholarship fees.
Getting a student loan is a fairly straightforward process. You will apply for the loan from a federal or private lender and then wait for the funds to flow to your school.
How to get a federal student loan
To determine your eligibility for federal student loans, you will need to complete the Free Federal Student Assistance Application, or FAFSA. You’ll need to meet federal, state, and university deadlines for help each year, so make sure you’re up to date on current deadlines.
You will complete this online form, which can take up to an hour, and you will need the following information handy:
- Social Security number
- Federal income tax returns, W-2 and other money documents you have earned
- Bank statements and investment records (if applicable)
- Registers of untaxed income
- A federal student aid identifier
- If you are not a U.S. citizen, your alien registration number
Approximately one to three weeks after submitting your FAFSA, you will receive financial assistance which may include grants, scholarships, co-op programs, and loans. It’s probably a good idea to complete the form even if you don’t think you qualify for financial assistance, as you never know what you might be entitled to unless you apply.
If you have the option, you may want to take out a subsidized loan rather than an unsupported loan. Subsidized loans are made on the basis of financial need, and the government pays the interest on your loan while you are in school. Financial needs are not factored into unsubsidized loans and interest begins to accrue immediately. Subsidized and non-subsidized loans have the same interest rate, which is set at 3.73% for the 2021-2022 school year.
You won’t need a credit check with federal loans, with the exception of a Direct PLUS loan, which is loaned to parents of undergraduates or professional and graduate students. This loan is not based on financial need and has a higher interest rate than subsidized or non-subsidized loans.
You will need to sign a principal promissory note if you choose to take out a loan. An MPN is a legal document that you sign to promise to repay your loan along with interest and fees. You will also determine how much money you want to borrow and your repayment term. The government will not disburse your loan until you sign this document.
You can generally expect your school to receive your federal funds around 10 days before classes start. You can experience a 30-day delay if you are both a freshman and a first-time borrower.
How to get a private student loan
Private student loans often come with higher interest rates and less protection for borrowers than federal student loans, but you may need to withdraw them if your federal options don’t cover the cost of your school.
You can find different applications for private student loans on the websites of the lenders. You will likely need to provide financial and identification documents similar to those from the FAFSA, although the requirements vary by lender.
Private lenders will perform a credit check to determine if you qualify for a loan, just like the federal government does with Direct PLUS loans. Discuss the details with your particular lender.
You can apply for a private student loan much faster than a federal student loan. You can get your rates and see if you’re approved for a loan in minutes with some companies, and most companies will give you an approval decision within 15 minutes.
If you want to know the status of your loan disbursement, you can usually go to a lender’s online portal or call customer service. You will need to agree to terms similar to an MPN and sign a binding document.
Once you officially accept the loan, your college will likely get funds from a private lender within two to 10 weeks. You will get the funds in your personal bank account if you take out a consumer loan, while your school’s financial aid office will receive the money if you take out a school certified loan.
Getting a student loan is a relatively painless process, but you may have to wait a while after accepting your loan to see the funds disbursed into your account.