How Do You Get a Student Loan? How to Apply and Receive Your Money

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• You apply for a federal loan with the FAFSA and a personal loan on the lender’s website.
• The FAFSA takes about an hour to fill out, while private applications can take just a few minutes.
• You need a credit check to get a private loan and a Direct PLUS loan from the government.
• Find out more about obtaining or refinancing a student loan with CommonBond »

If you need help with financing your studies and haven’t received enough money through scholarships or dual study programs, you may need to take out student loans to cover school costs.

Getting a student loan is a relatively straightforward process. You apply for the loan through a government or private lender and then wait for the money to be paid out to your school.

How To Get A State Student Loan

Brief information:

• It takes about an hour to fill out the free application for federal student grants.
• The interest rate on subsidized and unsubsidized loans is set at 3.73% for the 2021-22 school year.
• You can usually expect the government to pay out about 10 days before classes start.

To determine your eligibility for federal student loans, you need to complete the free federal student grant application (FAFSA). You have to meet federal, state, and college deadlines for support each year, so make sure you keep up to date with the current deadlines.

You will fill out this online form, which can take up to an hour to complete, and must have the following information on hand:

• Social security number
• Federal income tax returns, W-2s, and other records of money you’ve made
• Bank statements and investment documents (if applicable)
• Records of untaxed income
• A federal student aid card
• If you are not a US citizen, your alien registration number

Approximately one to three weeks after submitting your FAFSA, you will receive a grant package that can include grants, scholarships, dual study programs, and loans. It is probably a good idea to fill out the form even if you think you are not eligible for financial assistance as you never know what you might be eligible for unless you apply.

If you have the opportunity, you might want to take out a subsidized loan rather than an unsubsidized loan. Subsidized loans are given based on your financial needs and the state pays the interest on your loan while you are in school. In the case of unsubsidized loans, the financial needs are not taken into account and the interest starts running immediately. Both subsidized and unsubsidized loans have the same interest rate, which is set at 3.73% for the 2021-22 school year.

You don’t need a credit check with federal loans, with the exception of a Direct PLUS loan, which is loaned to the parents of undergraduate students or to professional and doctoral students. This loan is not based on financial need and has a higher interest rate than subsidized or unsubsidized loans.

If you want to take out a loan, you need to sign a Master Promissory Note. An MPN is a legal document that you sign to promise to repay your loan along with interest and fees. You also determine the amount of money you want to borrow and your repayment deadline. The government will not pay off your loan until you sign this document.

You can usually expect your school to receive your federal funding about 10 days before classes begin. There may be a 30 day delay if you are both a freshman and a first time borrower.

How to get a private student loan

Brief information:

• You may be able to get approved for a loan with a private lender in as little as three minutes.
• You must pass a credit check to get a personal loan and you may need a co-signer.
• Your college will likely receive funds from a private lender two to ten weeks after accepting your loan terms.

Private student loans often come with higher interest rates and less protection for borrowers than federal student loans, but you may need to take them out if your state options don’t cover your school’s costs.

Various student loan applications can be found on the lenders’ websites. You will likely need to provide financial and identification documents similar to those used by the FAFSA, although requirements vary depending on the lender.

Private lenders do a credit check to see if you qualify for a loan, much like the federal government does with Direct PLUS loans. Discuss details with your respective lender.

You can apply for a private student loan much faster than a federal student loan. Some companies will let you get your rates and see if you have been approved for a loan in minutes, and most companies will give you an approval decision within 15 minutes.

Usually, if you want to know the status of your loan disbursement, you can check a lender’s online portal or call customer service. You have to agree to similar conditions as in an MPN and sign a binding document.

Once you officially accept the loan, your college will likely receive money from a private lender within two to 10 weeks. You will get the money in your personal bank account when you take out a direct loan, while your school’s financial assistance office will get the money when you take out a school certified loan.

Obtaining a student loan is a relatively painless process, but you may have to wait a bit after accepting your loan for the funds to be paid out in your account.

source https://collegeeducationnewsllc.com/how-do-you-get-a-student-loan-how-to-apply-and-receive-your-money/