Applying for Student Loans

Applying for student loans is first about establishing which type of education loan you need to apply for. Remember that there are two basic kinds of college loans—federal student loans, and private student loans, and each requires its own application as such.

Applying for Federal Student Loans

If you are in search of student loans with no cosigner then federal education loans are ideal for your situation, as they will never require that you provide a cosigner, or submit to a credit check. This is because they are not based on credit, and are rather based on financial need. Federal student loans are almost always applied for before private student loan funding.

Because they are provided universally now by the Department of Education via the Direct Loan Program, you need not have to worry about applying to third-party private lenders anymore. With the abolishment of the FFELP Loan Program, all federal student loans are now provided directly from the Department of Education, and therefore the only application you need to complete is the FAFSA, better known as the Free Application for Federal Student Aid.

Here are some tips with regard to filling out and submitting the FAFSA on time and in a complete fashion:

• The earliest you can submit a FAFSA is January 1
• The latest you can submit a FAFSA is June 30
• You have a choice to complete a hard-copy, or the online version
• The hard-copy can be obtained at your school, or by calling 1-800-4-FED-AID.
• The online version can be completed at fafsa.ed.gov
• You must be able to satisfy the federal student aid eligibility requirements before you apply
• A social security number, driver’s license, and perhaps an alien registration card will be needed
• Tax returns, W-2s, and perhaps your parents, or spouse’s tax documents will be required
• It should take about two hours to complete the FAFSA online
• A Student Aid Report (SAR) will be sent to you about 2-3 weeks upon completion of the FAFSA

Once you have received your SAR and have reviewed it to make sure that everything you provided during the completion of your FAFSA was accurate, it will then just be a matter of time before you receive your award letter from your college that should detail the federal aid you may have qualified for.

The SAR you receive will not contain the explicit federal student aid awards that you will be guaranteed to receive for the upcoming school year, and rather will contain your EFC, and eligibility status for certain awards such as the Pell Grant.

Your job once you have reviewed your SAR is to sit tight, and wait for the award letter that will be sent by your college at some point in the Spring that will detail your entire financial aid award package. It will then be up to you to decide what aid to keep, and what aid to reject, if any.

This article about submitting the FAFSA can help prepare you before you go ahead and fill out the application, and can guide you through the process when completing the form.

Applying for Private Student Loans

Applying for private student loan funding consists of a much different process when compared to applying for federal student loans, as instead of having to fill out only one universal application, you are going to have to complete a distinct application for each private student loan you need to apply for.

Remember that private student loans aren’t provided by the federal government or the Department of Education, and are rather made by independent private lenders that are usually banks, or other types of lending institutions. This means that each private student loan lender is going to want you to complete their own unique application, which may, or may not be similar to other private student loan lender’s applications.

That being said, most private student loan applications are fairly similar, and will ask you to provide virtually the same information that you provided when you completed your FAFSA. The following information will most commonly be required when filling out a private student loan application:

• Name and Date of Birth
• Spouse’s Name and Date of Birth (if married
• Address
• Social Security Number
• School of Attendance
• Employment History
• Income Level
• Tax Information
• Credit Information—will have to submit to a credit check
• Mortgage information
• Bank information
• Asset information
• Level of student loan debt
• Cosigner information

Private student loan lenders will pay particular close attention to your level of income, credit situation, and whether or not you will be providing a cosigner. If you are like most college students and have a low income with almost no credit history, then it will be very difficult for you to get an approval without a cosigner.

Most private student loan lenders encourage students to apply with a cosigner beforehand just so that they don’t waste their time. Having a credit-worthy cosigner that has good credit and an established income can almost guarantee a fast approval, and even having a suspect cosigner with moderate credentials can at least give you a reasonable shot at getting approved.

Getting a Private Student Loans With No Cosigner

Is it possible to get a private student loans without a cosigner? Yes, but you have to have an established credit history, at least what is considered to be a fair to good credit score, and an established and regular income. Private student loan lenders have specific guidelines and will never provide a loan to a student who cannot demonstrate that they can repay the loan even if they don’t graduate.

Having a small credit history, a low credit score, and a part-time income will get you a rejection almost one-hundred percent of the time, and I recommend to students that they don’t even attempt to apply if these are their credentials. The key really is in finding a credit-worthy cosigner, and you should have a chance at getting approved as long as your cosigner is employed, isn’t going through a bankruptcy, and has at least a “fair” credit score.

Private Student Loan Lenders

There are a solid number of reputable private student loan lenders, who make available both written applications and online versions that you can complete over the Internet. My advice is that you apply to a few lenders at a time to see which lender can give you the best offer, especially if your credentials are a bit suspect.

You don’t have to accept their offer even if they issue you an approval, and by applying to different lenders you’ll be able to compare and contrast what various lenders can make available to you in terms of the interest rate and fees you’ll have to pay.

Try and have the above personal information close by when going to complete a private student loan application, as this can greatly hasten the entire process, and reduce your chances of making a mistake.

Please refer to this list of 14 private student loan lenders that I recommend to student and parent borrowers who are in search of private student loan funding.