You’ve gotten accepted into college, but now your face-to-face with an uncomfortable question: how are you supposed to pay for school? Beyond scholarships and grants, there’s student loans. Accepting the first student loan option you are offered can be tempting, especially when it can make the difference between attending or not attending college. However, accepting the first option that comes along can also be a big mistake. It can also leave you with unnecessary debt. Instead, resist the urge and look around for other student loan options.
There is No One-Size-Fits-All Student Loan
Student loans come in all shapes and sizes. It takes time, persistence, and dedication to go through all of the options available, read through the fine print of each option, and identify those that may be the best choice for you. But in the end, the time you spend exploring your options may be well worth it. You never know if you’ll find a better student loan that fits your unique financial situation.
Start with Federal Loans
As a rule, when looking at student loans, always, always start with federal loans. These offer the lowest interest rates and the most flexible repayment plans. So file the FAFSA, exhaust your scholarship options, apply for Federal loans.
Of course, start by exhausting your scholarship and grant options. Scholarships and grants, which you can also get through FAFSA and other organizations, are free money. That means you don’t have to repay your award amount, which means less debt when you graduate.
Do Your Homework on Private Loans
Only look into institutional and private student loans if you need to go over and above what the federal student loan offered you. Colleges you applied to offer institutional loans and banks, credit unions, and other financial entities offer private student loans. The interest rates and terms of institutional and private loans can vary widely so make sure you read through it carefully before making any commitment. Your loans can have a major impact on your financial circumstances after you graduate.
Know the Elements of a Loan
If it’s your first time taking out a loan, it can be a bit overwhelming. There are a ton of factors that go into a student loan, and it can be tempting to just pick the first option to get it over and done with. But it’s really important to know what you’re getting yourself into before you sign the dotted line. Student loans are a huge commitment and can greatly impact your life. Luckily, we’ve got a number of helpful student loan articles to help you get started.
- A Beginner’s Guide to Student Loan
- FAQs about Student Loans
- Student Loan Season is Coming: Here’s What You Should be Doing
- What is a “Good” Interest Rate for Student Loans?
- When is the Best Time to Apply for Student Loans?
- Student Loan Glossary: Terminology Every Borrower Needs to Know
And College Raptor has its very own Student Loan Finder, where you can compare lenders and interest rates—for FREE!