How do I take out student loans?

First off, congrats on school! Now, before you borrow, it’s important to know what you’re getting into. There are two main categories of loans, federal and private. You’ll have to gather some documents and fill out applications to take out either type. We can help.

What do I need to know about FAFSA?

FAFSA stands for Free Application For Federal Student Aid. Filling out a FAFSA is required for you to be eligible for federal student loans, as well as scholarships and grants. After you complete a FAFSA, the government will send your application to all the schools you’re applying to. Based on that, each school will offer you a different aid package. Let’s get you started with the below article.

What is the difference between private and federal loans?

Student loans fall into two basic categories — private student loans and federal student loans. It is advisable to prioritize getting federal student loans over private because federal loan rates tend to be lower, and offer protections such as loan forgiveness and repayment plans that private student loans do not.

Which student loan lenders should I consider?

If you’ve already maxed out your federal student loans or are looking to refinance your student loans, you’ll need to consider a private lender. Remember, this is a relationship that’s going to be in your life for awhile — it’s important to choose someone trustworthy. Some key lenders are Sallie Mae, Wells Fargo, ACS, and Great Lakes.

What is the difference between fixed versus variable interest rates?

Interest rate is the percentage charged by the lender for use of borrowed money. You pay this on top of the loan you take out. A fixed interest rate never changes. You will pay the same percentage interest rate during year one of borrowing as you would 10 years later. This can protect you from rate increases. A variable rate changes with the market. Your payments may go up or down depending on if the market goes up or down.

What do I need to know about undergraduate versus graduate student loans?

A few things. To start, undergraduate student loans tend to have lower interest rates, though borrowers with great credit scores may get a lower graduate loan rate if they go with a private lender. Undergraduates have access to subsidized federal student loans, which means interest doesn’t start accruing until after graduation. Graduate students do not. However, graduate student loans may have more options when it comes to refinancing.

How do I get a loan if I have bad or no credit?

Lenders expect you to have a solid credit score, but you can’t even take out a credit card until you’re 18. What gives? If you have bad or no credit, start by applying to federal student loans. You don’t need a credit score to apply. If you’ve maxed out your federal student loans, you can also consider taking out a loan with a co-signer (who has a good credit score) or asking your parents to take out a Parent PLUS loan.

How can I lower my student loan payments?

If you have a federal loan, you may be eligible for income-based repayments that better balance what you earn with what you pay. Student loan refinance can also lower your payments whether your loans are federal or private.

How can I pay off my student loans faster?

If you have some extra cash, you can make an extra payment, pay more than your statement, or pay a lump sum. But that’s easier said than done. If you have federal loans, you can explore loan forgiveness programs. Student loan refinance can help you pay off your loans faster whether they are federal or private.

What is student loan consolidation and is it right for me?

Student loan consolidation is a way to simplify your federal student loan repayments by combining multiple loans together. Instead of paying multiple bills each month, you only pay one — on the sum total of all the loans. Consolidation won’t lower your interest rate, but can get you a fixed interest rate. Only federal loans are eligible for consolidation. If you have private loans, a combination of loans, or just want a lower interest rate, consider student loan refinancing instead.

What is student loan refinancing and is it right for me?

Student loan refinancing means that you take all of your current debt with a new lender, who can provide you with new terms including a different interest rate or repayment period. It helps you keep your debt more organized, and could save you money in the long-run. If you want a lower monthly payment, long-term savings, or a fixed interest rate, consider student loan refinancing.

Can student loans get forgiven?

Yes — but there are a lot of caveats involved. We’ve done the legwork so you don’t have to click hundreds of links about student loan forgiveness, just the one below.

What are my options if I need student loan relief?

It’s totally normal to feel overwhelmed by student loan debt. If you need help repaying your debt your main three options are student loan consolidation, refinance, and forgiveness. Each has particular benefits and potential drawbacks depending on your situation. We’ve made it easy to figure out with the guide below.

What is income-driven repayment?

Only federal student loans are available for income-driven repayments. These calculate your monthly payment to 10-20% of your discretionary income, which can help reduce your payments, in some cases, significantly.

What relief options are specifically available for teachers and nurses?

People in service professions who have federal student loans could be eligible for reduced payments or even student loan giveness. We’ve put together a guide for anyone already in those careers, or anyone who is career planning.

What is student loan forbearance?

Loan forbearance allows you to delay your federal student loan repayments if you find yourself in a situation where you can’t pay. Remember, it’s a Band-aid. Your interest will continue to accrue if you choose forbearance.

What is deferment?

Loan deferment is similar to forbearance in that it allows you to delay your federal student loan repayments if you find yourself temporarily unable to pay. It differs from forbearance because in some cases, your interest will not accrue while your payments are on pause.

What happens if I declare bankruptcy?

Unlike other kinds of debt, you may still be responsible for your student loans if you file for bankruptcy. It’s a complicated issue, but we’ve tried to lay it out simply in the below article.

What if I’m late on a payment?

As tempting as it can be to skip a student loan payment (or even sometimes, necessary), doing so will hurt you in the long run with late fees and damage to your credit score. Don’t stress, we’e got you covered, below.

What if I’ve defaulted on my loans?

Being in default on your student loans can have consequences on your financial future. We can help.

When should I be a co-signer?

Every parent wants to help their kid get a great education and co-signing a student loan is one thing you may be asked for. It’s might be a great solution, but is not always the best way to help. Dig deeer with these articles.

What can I do to help my child get the best rate?

What are Parent PLUS loans?

How should I think about student loan debt vs. my other debt (especially my car loan?)

If you’re tight on money and wondering whether you should pay your student loan bill or your car loan or your credit card bill, it’s time to prioritize. We’ll help in the below article.

What tools or calculators can I use to create a budget?

Give yourself a pat on the back for asking. Creating a budget is an excellent step towards financial help. We’ve rounded up some of the best tools out there (including our own) to get you started.