A student loan is a kind of financial assistance that has helped many students access higher education. It offers many of them the opportunity to learn and study whatever course they desire, thereby fulfilling their lifelong ambitions.
In the US, research has shown that a lot of people get this financial aid. As a result, the student loan debt has risen ridiculously to a total of $1.73 trillion by July 2021.
Of this figure, graduate loans gulp almost half of it, while the average Bachelor’s degree constitutes up to $30,000 as debt after graduation.
Notwithstanding, many people are still passionate about obtaining student loans but are worried about getting them.
This article will discuss everything you need to know about student loans and personal loans and seek them in the US.
What is a Student Loan?
In simpler terms, student loans are the money you borrow either from a private lender or the government so that you can be able to pay your college costs such as tuition, books, supplies, or living expenses.
Usually, government loans have lower interest rates and are equally more flexible to repay than private funds.
How Much of a Student Loan Can I Get?
The question of how many student loans you can get is not as tedious as may be assumed. The student loans that can be accessible are limitless.
However, the maximum amount you may be opportune to get strongly depends on certain factors—one of which includes whether such loans are government-owned or given by private lenders.
Usually, undergraduates have the privilege to borrow as much as $12,500 annually and a total of $57,500. In contrast, graduate students have the opportunity of borrowing up to $20,500 per annum and a total of $138,500.
Types of Student Loans Available
More often than not, there are three types of personal loans that can be secured. These include federal (government) loans, private loans, and refinance loans.
- Federal Loans: otherwise known as government loans, is the loan offered by the government to students who wish to pull through an undergraduate or postgraduate academic program. It is the most flexible amongst every other type of loan available to students.
- Private loans: usually, banks, credit unions, and other traditional financial institutions make this kind of loan available.
- Refinance loans: similarly, refinance loans are made available by banks, credit unions, and traditional financial institutions.
To obtain government loans, you have to fill out a Free Application for Federal Student Aid called “FAFSA”.
Meanwhile, private and refinance loans can be gotten directly from the bank or any other financial institution you intend to lend from.
But it would help if you were wary of not obtaining more loans than necessary.
Tips For Choosing the Right Student Loan
Truthfully, going to school in America can be a little expensive. As a student who needs to obtain a personal loan, you should be wary of certain things and consider them before financing your education.
Below are a couple of tips that have been collated to assist you in choosing the right student loan:
- Know how much you need
- Fill the FAFSA form
- Research federal loans
- Research private loans
- Compare options and costs
- Apply for student loans
- Sign a Master Promissory Note (MPN)
- Be aware of the due date for the first payment
Getting financial assistance in the US has become increasingly important for students. Thus, the need to seek a personal loan.
If you fall into this category, you can try as much as possible to reach any of the aforementioned financial institutions.
These include federal loans (government), private or refinance loans. When you do this, you are on the right step towards making your schooling dream come into reality.