It seems like everybody takes student loans these days. They must give them out to any person in need, right? Not always.
Typically, the demands to get student loans are not very restraining, but still, there are particular criteria you must meet in order to be considered.
These criteria vary at the private and federal level, but almost every loan you get during your life will have some demands to meet first.
More than that, if you happen to meet a lender eager to give you out a loan without any demands and restrictions, they are most probably predatory and should better be avoided.
Want to know if you qualify for private or federal loans? Check out this information from the Installment Credits blog.
Demands for Federal Student Loans
Here are the necessary and basic things to consider before obtaining a federal student loan.
- First of all, you must have a valid Social Security number.
- You must be a citizen or eligible noncitizen. Federal or state financial aid is not given to undocumented immigrants. Permanent residents who have green cards may be eligible. Also, immigrants with T-1 or refugee status can apply for federal funding.
- You must fill out the Free Application for Federal Student Aid or FAFSA. So, if you are a high schooler who is interested in receiving the federal funding, this application form will give you an opportunity to define how much you may qualify for because it asks about your family’s financial situation.
- A person needs to provide a high school diploma or another credential, such as a GED.
- You need to be a student of an eligible and accredited school. If your school is not eligible and unaccredited, you may not qualify for federal funding. In addition, some schools choose not to get federal funding themselves.
- Another criterion is to maintain a 2.0 cumulative GPA. Otherwise, you risk losing federal aid until you improve your grades.
Subsidized or Unsubsidized Loans
Subsidized loans can be given only to those students who have filled in the FAFSA application form which showed their financial need. While you are studying in school, these loans won’t charge interest from you.
If you want to delay the loan, you won’t have to pay the interest during your study too.
If you have filled out this form and it turned out you don’t meet the demands for getting the federal funding, you can still get unsubsidized loans.
Such type of student loans collects interest during the whole semester as well as during the six-month period after the graduation. In addition, parents may be eligible for getting unsubsidized PLUS loans for the total cost of attendance.
Student loans, as well as credit cards, have a lot of nuances to consider: here are the most important things you need to know about the credit cards.
Private Student Loans
Those college students who don’t qualify for the federal government aid may be eligible for private loans. This type of loans generally needs a cosigner, such as a parent, who will have to take on your student loan if you fail to repay it.
Pay attention that every private loan lender may have different demands, so make sure you check their requirements in order to find the best option.
The majority of private loan servicers demand a minimum credit score and income to be eligible for the loan. Typically students don’t have credit history or income, therefore the borrowers ask for a cosigner to make certain the loan will be paid off. In other words, it always pays to be picky and shop around before you make your choice.