If you have to take out student loans to pay for your studies, it is important to know the ins and outs of borrowing and avoid falling victim to student loan myths that can cost you.
One of the most important things to know? The deadlines for both federal and private student loans. In general, you must apply for the financing you need every year and you could be excluded from the most affordable loans if you wait too long to take action.
What are the deadlines for private student loans?
Private Student Loans do not have the same strict deadline that applies to federal student loans. In fact, you can usually apply for a private student loan at any time — making this option attractive if you discover that you haven’t received enough federal aid to fund all of your expenses during the school year.
However, you want to make sure that your private lender is able to disburse the funding to your school by the payment deadline — meaning your school’s tuition due date can serve as a de facto deadline for securing your credit. financing your private loan. If you’re trying to get your money to your school on time, find out how long each private lender’s approval and disbursement process takes and make sure you request enough time for them to approve you and release your money.
The specific timeline for obtaining a private student loan can vary significantly from one lender to another. Many will approve you within minutes and can pay out the financing in a few days to a few weeks. Others may require more financial documentation or there may be secondary reviews in addition to the automatic approval of online loans that slow down the process and result in a longer delay before your funds can be released.
If you know that you need to borrow for the next academic year, consider buying loans from Credible today so you don’t wait until the last minute and find yourself struggling to secure funding when tuition is due.
You also want to make sure you have time to find the right private lender, as there can be significant variations in interest rates, qualification requirements, and loan terms from one lender to another. In fact, you should always ensure that you get quotes from various private lenders and compare their loan offers before formally applying to the one that offers you the best deal.
The good news is that Credible makes it easy to find the right loan so you can move quickly if needed. You can visit Credible to view a rate table to compare fixed and floating rate loans from multiple lenders at the same time and use their use online student loan calculator to see what your monthly payment would be with different loans.
What are the Federal Student Loan Deadlines?
It is always best to take out the maximum amount of federal student loans available to you before applying for private student loans, as Department of Education loans offer affordable fixed interest rates, easy eligibility regardless of credit history, and are both flexible repayment options and the possibility of loan forgiveness.
To be eligible for federal student loans, you must have the Free Application for Federal Student Aid (FAFSA) for each academic year that you need funding.
The FAFSA will be available in early October and should be completed as soon as possible. For example, the FAFSA for the 2020-2021 academic year was first available on October 1, 2019. It is advisable to complete the FAFSA immediately because many species federal financial aid are available on a first-come, first-served basis and you don’t want to be limited in the help you receive because you’ve waited.
While you must complete your FAFSA right away, the actual deadline is long from the time the forms are first available online. In fact, it is not until the end of June of the following year.
Some states and colleges have deadlines earlier than the federal ones, and your college must also be able to access your information from the FAFSA on your last day of enrollment during the 2020 to 2021 school year—which is another reason you don’t want to wait until the last minute to fill out your forms.