To help get you started learning about college financial aid, we’ve put together 10 important student loan tips for beginners. Once you have finished here, take a look around at all of the student loan and college financial aid information we have available for beginners on CollegeWhale.
1. Free money is the best kind of money, and there is no exception to that when it comes to paying for college. Scholarships and grants for college are your best option because they provide you with money for college that unlike student loans, you will not have to pay back.
2. College scholarships and grants can take some work to find, but it is well worth it. Try keyword searching your desired field of study or checking with your employer/organizations your affiliated with for starters. You should never have to pay money to find scholarships for college, remember that!
3. After exhausting all of your free money options, your next financial aid source should be federal student loans, not private student loans.
4. FAFSA is your friend! Some of the best student loan advice for beginners is to file a FAFSA. A FAFSA is the Free Application for Federal Student Aid. All students interested in college financial aid must file FAFSA.
5. File a FAFSA even if you think you will not qualify for federal financial aid, or others tell you that you will not qualify for federal financial aid. The truth is, most students will qualify for some form of federal financial aid, and there is certainly no harm is applying.
6. File FAFSA as early as you can, and most certainly before the FAFSA deadline. A misconception with FAFSA is that you need to have filed your taxes before you apply, this is not true. You can use estimates (for both you and your parents) to push your FAFSA application into the early applicant pool. Again, file as early as possible to ensure you get the most federal financial aid.
7. Federal student loans are the best student loans because they offer better rates and more flexible repayment terms for borrowers. Never apply for a private student loan until you have exhausted all of your other financial aid options for college.
8. If you do need to supplement your college funding with a private student loan, do your research. All private student loans for college are not created equal. You should carefully read and understand the rates, terms and conditions of a private loan. If you have questions regarding a private student loan that you are interested in, you need to ask the lender. If the lender is unwilling to answer your questions or concerns in a manor that is timely and helpful, look for a different private student loan lender.
9. Be prepared to have a cosigner for a private student loan. Private student loans are based on credit history, which many college students do not have much of. The interest rate you will qualify for on a private student loan is tied to your (or your cosigners) credit, this is why having a cosigner with outstanding credit can help ensure you get the best rate and/or terms as possible.
10. Applying for many private student loans over an extended period of time can hurt your credit. It is best to do your research on private student loan lenders, select the private student loans you like best, and apply to them all with the period of about a month. Never apply for more money then you absolutely need, unnecessary private student loan debt can burry you financially.