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Figuring out how you're going to pay for school can be a nerve-wracking experience.
Between scholarships, grants, and federal loans, there are lots of options to help
offset the costs. However, you may find that even with financial aid, you can't cover
all the costs of your education. Another option for you may be private loans for
school. But before you decide to get a private loan, it's important to make sure
it's the right option for you.
Did you apply for federal financial aid?
The first thing you should do before considering private loans for school is to fill
out the Free Application for Federal Student Aid, also called the FAFSA. It will
use your income and the cost of school to determine what, if any, federal financial
aid you qualify for. This often includes federal loans, which can have better terms
than private loans, and may not need monthly repayment until after you're done with
school.
How much do you need to help pay for school?
Some people find that, after financial aid, they only have a very small amount to
pay for tuition or books or other fees. If the amount you need is very small, getting
a private loan may be a good option. Your payments may be less, and you may be able
to pay it back quickly so it won't be a burden to you financially. On the other hand,
if you only need a small amount of money to pay for school, getting a private loan
may not be the best option. Instead, you may find that readjusting your budget will
be a better choice.
Can you make payments on a private loan for school while still taking classes?
Unlike some federal loans available to students, private loans for school will require
you to make monthly payments from the first month the loan is awarded to you. It may
help you cover initial costs like tuition and books, but the monthly repayment will
need to be added to your monthly budget. If you can't make monthly payments while
you're still taking classes, a private loan may not be the best option for you.
Will you qualify for a private loan for school?
Qualifying for federal financial aid is different from qualifying for private loans for
school. Federal aid focuses on your need and the cost of education, while private loans
may take other things into consideration, such as your credit history and employment
status. For some students, this could mean you don't qualify for a private loan or,
if you do, you won't qualify for enough to help with your education costs.
Private loans for school can be a useful financial tool as you are working on getting
your degree. However, like any loan, it's important to approach it with all the information
you need, and with as objective of an perspective as you can. Don't get private loans for
school simply because it's the easy option. Instead, look at all your choices, talk to
your financial aid adviser, and make sure that getting a private loan really is the best
option for you.
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