Everyday, thousands lose their jobs as companies lay off workers due to the financial crunch. It’s unthinkable. How one morning, everything’s going so good for everyone until we wake up one day faced with a financial crisis that’s hitting everyone in the food chain from the bottom up. At times like this, the importance of having a degree tucked under your belt is magnified. Yes, you may be an ace worker but your academic credentials give you a better shot at life during the crisis especially when you need to find a new work and all you have is that resume you had printed out. But at the same time, parents and self-supporting students alike are faced with the same problem. How do you finance education when you don’t even have enough to settle your everyday bills? The solution: a student loan.
Obtaining a private loan to finance education essentially requires four steps. First, the Free Application for Federal Student Aid (FAFSA) must be completed. The FAFSA is a standard form that is used by all schools from colleges that offer two or four-year courses to universities and vocational or career schools to award financial aid for students. All you need to know about the FAFSA, including filling up the form is available at the FAFSA website (http://www.fafsa.ed.gov/). Next, you should ask yourself: what is my credit score? Credit score is a number calculated based in an algorithm which essentially predicts your likelihood to pay back a loan versus the chances of being delinquent or filing for bankruptcy. Having a good credit history gives you a better shot at being granted for a loan whether a college loan, housing loan, car loan and basically almost everything that requires borrowing money from a bank or financial institution. Your credit score tells you if you’re qualified for a loan or how much interest a financial institution will charge you and how much you can borrow from them. The rule of thumb is: the higher the score, the better. In applying for a student loan, you also need a co-signer. A co-signer is an individual who promises the financial institution that he/she will pay back the money borrowed if the primary borrower fails to pay or goes into default. Because of the risks of having to pay someone’s debt, some people are wary of being a co-signer, thus, it may be an obstacle in applying for a student loan. However, the chances of being approved for a college loan is higher when you have a co-signer who will vouch for you than having someone without. So instead of getting a “no” and missing your shot at a college education, it’s better to have a co-signer. This can virtually be any adult with a good credit standing and importantly willing to take on the liabilities of your loan if you fail to pay back. Most often, the co-signer is a parent or a relative and sometimes may be the spouse or a friend.
The last step in obtaining a private loan for students is to look for a reputable financial institution. Here is where our friends, the likes of NextStudent (http://www.nextstudent.com) enter the picture. These financial institutions are the ones responsible for awarding billions-worth of college scholarships to students eager to enter college. Basically, the differences between one institution from the next lie in what each institution offers. Some offer low-cost student loans which can be easily paid when one gets out of college, borrower discounts and even flexible payment option schemes. Some lending institutions also provide counseling by private finance advisors who are more than willing to help you in your dire need.
So, are you ready to apply for a college loan?
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