As you probably already know, paying for college is quite an expensive investment that can cost well-over $10,000 per year for tuition at a traditional four-year public institution. So it’s very important to find the best student loan, or combination of student loans, possible in order to save money and reduce your student debt when you graduate. I’ll try and point you in the right direction when it comes to searching for the best student loan possible – one that has low interest rates, flexible repayment terms, and is widely available to students.
You need to be realistic when starting your search for student loans. Ask yourself how much is it going to cost per year to go to your desired institution, including tuition, cost of books, living expenses, and other school-related materials. Once you come up with a good, solid figure, it’s time to begin your search for the best student loan possible according to the parameters mentioned above.
The first step to take is to fill out the Free Application for Federal Student Aid, or FAFSA, which is required if you want to apply for any kind of federal financial aid – Hint: You do want federal financial aid!! The two main types of federal student loans available are Perkins and Stafford. Perkins student loans have the lowest interest rates, but they’re also only available to the students with the greatest financial need. Stafford student loans are the next best student loan choice out there and is the one that most students use to pay for college expenses. Stafford loans have interest rates as low as 6%, and they let you to borrow anywhere from $5,500 to $20,500 per year depending upon whether you are a dependent or independent student and what year you are entering (first year, second year, graduate, etc-).
Perkins and Stafford loans are the best student loan choices out there, and they allow you to use the money for any college-related expense. This includes tuition, living expenses, computers, books, transportation expenses and more. If the Perkins and Stafford student loans aren’t enough to cover all of your estimated yearly college expenses, you need to consider supplementing private student loans to cover the balance.
Private college loans will almost always have higher interest rates than federal student loans, and they also require that you, or a cosigner, have good enough credit to qualify for the loan. Unlike federal student loans, private student loans are only available to people with a good credit history and being that many new students lack any kind of credit history, it’s much tougher to obtain private loans for college. To obtain private student loans, you must fill out an application at your local bank or an online banking institution that provides private student loans.