When figuring out how to pay for higher education, students often decide to utilize loans for students. Student loans are an appealing option because there are many different types of student loans available for a wide range of incomes. However, there are some important things to know when getting student loans.
Students should keep in mind that student loans often have minimum school attendance requirements. To receive a student loan, either part-time or full-time enrollment is required, depending on the financial institution. Since loan providers typically send money directly to schools, they may verify student enrollment through the college or university before disbursing the loan.
Accepting a student loan means that you are obligated to repay the loan. Signing a promissory note either online or on paper is legally binding, and it means that the signer agrees to the terms of the loan. Usually, students are not required to make payments on a loan while they are currently attending classes. However, interest may accrue during this time period and is added on to the original or principal loan amount.
Deferment or Forbearance
After graduating, students are often given a grace period before they are required to begin repaying loans. The grace period can range from three to nine months, depending on the financial institution. In the event that a student cannot afford to make payments on a student loan, he or she may apply for a deferment or forbearance, which temporarily delays the payment’s due date. It is important to know that not all financial institutions offer deferment or forbearance as an option. This information can be found by reading the terms of the student loan before accepting it.
Some financial institutions require students to meet credit history and minimum monthly income requirements before approving student loans. Negative credit histories may result in the denial of a student loan or a conditional approval, such as a higher interest rate. When students do not meet these eligibility requirements, an eligible cosigner may be needed for loan approval.
Basic Personal Information
To qualify for a student loan, applicants are often required to submit basic personal information. This information typically includes the student’s U.S. citizenship, social security number, mailing address and phone number. Students might also be required to be at least 18 years of age before receiving a student loan.
Many times students must take out several student loans to pay for the total cost of completing college. After graduation, many of these individual loans can be consolidated. Consolidation is combining several loans so that the student can make a single monthly payment that is automatically distributed to each individual loan.
Sometimes students select occupations that qualify for loan forgiveness. For example, some programs will offer financial assistance for students who enter fields such as education, counseling and social work. Loan forgiveness programs may have special qualifications. For example, graduates might be required to work for a minimum number of years or in a specific geographical location before meeting the loan forgiveness requirements.