Your student loan will be part of your financial life long after you graduate from college. Choosing an affordable loan from a trustworthy vendor is essential. Follow these tips for securing the best student loan for your needs.
Complete the Free Application for Federal Student Aid (FAFSA)
If you plan to get federal student loans and grants to help fund your education, you must fill out and submit your FAFSA. File your paperwork early to be considered for the most awards possible. If you wait, money in the programs you qualify for may run out before you even apply.
If you know you will apply for a private loan, file your FAFSA anyway. Some colleges and universities also use the FAFSA to award scholarships and direct loans.
Compare Multiple Student Loan Options
You’ll want to research all of your options before you sign a student loan contract. Many loans aren’t due while you’re in school, but you need to make sure you can afford the payments once you graduate. Review the loan terms including any administrative fees and the annual percentage rate (APR).
The APR will determine your monthly payments and the total cost of your loan based on how much you borrow by the time you graduate. Websites that let you compare private student loan features at a glance make it easy to choose the best one for you.
Look for services that show terms such as APRs and fees. Other notable details include whether your loan has a fixed or variable APR and if the loan has interest-only or deferred repayment options.
Check Your Credit Score
When you’re ready to apply for a private loan, don’t forget to review your credit score. Many banks offer credit scores for free to their credit card customers. Check if your bank offers this service. If your credit score is low, try to raise the score by making payments on time and paying down revolving credit card debt if you can.
When you don’t have time to improve your credit score, you may need a cosigner to qualify for an affordable student loan rate. It’s best to know this as soon as possible. Ask family members for help long before your tuition is due.
Ask for Discounts
Some banks offer discounts for customers. You may also get a discount by authorizing automatic payments from your checking account. Charging an origination fee is a standard lender practice. However, the bank may waive this fee to ensure that you stay a long-term customer.
Request that the lender waive any fees in return for giving the bank your loan business. Always ask about available discounts to help save money on loan interest over the long-term.
Choosing a student loan is a significant financial decision that will affect your life long after graduation. Getting the best student loan now will help you avoid the hassle of refinancing your contract later. Shop around for different rates and ask for discounts to make sure you get an affordable student loan.