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General Questions about Loans
How do I choose the right student loan for me?
You have many options when it comes to student loans for higher
education. A few things to keep in mind:
- Fill out the Free Application for Federal Student Aid (or FAFSA). Without it, you won’t have access to federal student loans – many of which are not based on need or your income.
- Always use federal loans first, such as the Perkins, Stafford, and PLUS loans. They carry lower, fixed interest rates and often have more favorable terms than private (or alternative) loans.
- If you need to use private student loans, consider all of the costs. Private loans can have origination fees, different ways of compounding interest, and higher interest rates or APRs.
- Know your credit score. The lower your score, the higher your rate will likely be on a private loan. Most student borrowers will need a credit-worthy co-signer to be approved for a private student loan. Most private loans have variable interest rates (meaning they will fluctuate over time), while government-backed (or federal) loans have fixed interest rates and more lenient repayment terms.
Investigate your loan options carefully by considering the following:
- Total cost of the loan (after all of the interest and fees are taken into account)
- APR or annual percentage rate
- Borrower rewards (such as cash back or interest rate reductions for making on-time payments)
- Monthly payment
- Deferment options
How was this set of student loan results selected?
TuitionChart's loan search and comparison tools save you time by
doing the research for you. We connect you to the lender to apply
for the right student loan for your borrowing needs.
TuitionChart pre-screens loans based on your search criteria. We have up-to-date pricing and eligibility information from lenders, which allows us to present the most relevant loan options to you in an apples-to-apples comparison.
We filter loans based on the loan amount, student's school, degree program, and state of residence, and monitor any changes due to events in the lender and credit industry.
As the economy changes, lenders have tightened their lending criteria or even stopped lending altogether. Some lenders will not allow borrowing by students at certain schools because of the risk the student will default on the loan. Lenders often restrict the amount that they will loan, and some lenders are not licensed to lend in certain states.
I haven't heard from the lender I selected, and I applied
for a loan a while ago. Can you help me?
We recommend that you follow up with the lender directly for the
status of your loan application. Often, the application for a
student loan is delayed because of missing information on the
application. Confirm that you have provided the following
information, if requested, on the application:
- Proof of enrollment (letter from school, tuition bill, school certification)
- Proof of income (w-2, full tax returns, or copy of paystub)
- Signature verification (license, state identification, or military identification)
- Copy of the student’s visa (for international students who apply with a U.S. citizen or permanent resident as the co-signer)
- Credit agreement / promissory note / e-signature
If you are still having trouble, please contact us at info@tuitionchart.com with the name of the lender or student loan you chose and when you submitted the application and we will try our best to connect you to the lender.
What are my repayment options?
Most student loans have a few options for when you can start
repayment. If you are enrolled more than half-time, you usually do
not have to make payments on the loan while you are in school. If
the loan is in just a parent’s (or guardian’s) name, you often do
have to repay the loan taken out for your child, unless you are also
in school yourself. After you leave your program or graduate, your
loan may include a grace period of anywhere from 3 months to a year
during which you do not have to make repayments. Depending on the
type of loan, interest may or may not accrue during both the
in-school and grace periods.
When you first take out a loan, your lender may let you choose from three types of repayment options:
- No Deferment – where you must start repayment right away, even while still in school
- Interest-Only Payments – where you only make interest payments while you are in school
- Full Deferment – where you wait until you finish or leave school before payments begin
Check with your lender for details on these and other options for repayment.
What information do I need to apply for a loan?
In order to complete an application for a private student loan with
most lenders, you will need the following information:
- Your full name, social security number and date of birth
- Your permanent address and the number of years you have lived there (no P.O. boxes)
- The amount of your monthly rent or house payment
- Your home phone number
- Your current occupation and position
- The name of your employer and how long you have been employed by them
- The business phone number of your employer
- Your gross annual income
- The contact information for a reference (name, address, home/business phone number)
- The name of your school (or the school the student for whom the loan is for is attending)
- The social security number, contact and employment information for your co-signer (if applicable)
Applying for federal student loans may require somewhat less information, but does require completion of the FAFSA.
When do I need to fill out the FAFSA? Is there a
deadline?
You should fill out the FAFSA as soon as you can after January 1st
of each year. Because the FAFSA asks for tax information from the
previous calendar year, you may want to wait until your family has
all of the necessary paperwork or has filed their income taxes. You
can file the FAFSA before filing your income taxes using estimates,
but you will need to go back later and correct any discrepancies.
The only deadline for filling out the FAFSA is June 30th at the end
of the school year for which you are filing. In other words, for the
2010-2011 school year, the FAFSA will be available on January 1,
2010. You can file the FAFSA anytime between then and June 30, 2011.
However, many states and schools allocate funds on a first-come,
first-served basis, and some states have deadlines for filing the
FAFSA to be eligible for certain kinds of aid. Please visit the
Department of
Education’s Student Aid on the Web for more information.
What happens if I cannot repay my loans?
Lenders will not forgive loans simply because the borrower could not
find gainful employment or did not plan their budget well enough to
include loan repayments. Generally speaking, a borrower has to have
– and prove – mitigating circumstances in order to have their loan
payments postponed or forgiven altogether. These instances are rare.
Two options that are sometimes available for postponing repayment of your student loans are deferment (when you can postpone repaying your loan principal and, in some cases, interest) and forbearance (when principal and/or interest payments may be suspended)
Deferments are not granted automatically – you must apply for a deferment and provide documentation to support your request. Deferments are commonly granted for:
- students who are enrolled in undergraduate or graduate school
- disabled students who are participating in a rehabilitation training program
- unemployment
- economic hardship
Likewise, a forbearance is not automatically granted and required documented proof of extreme financial hardship or other unusual circumstances. For more information about deferments and forbearances, contact the financial aid office at the school that issued the loan or the original lender or current servicer of your loan.
Note that neither deferment nor forbearance is a given. Still, if you are concerned that you will not be able to repay your loan, you should definitely contact your lender to inquire about the possibility of deferment or forbearance. Make sure to make this inquiry before you miss payments. In most cases, if you default on your loan, you are no longer eligible for a deferment or forbearance.
Private Student Loans
What is a private student loan?
A private loan is a non-governmental loan made from a bank to an individual for the purposes of paying for college expenses such as tuition, room and board and other associated costs. Traditionally, private student loans are used to cover unmet need or the "gap" (costs not covered by scholarships or other loans offered by your school).
How do I know if I need a private loan?
Private student loans are an excellent, affordable way of paying for education costs that are not covered by other aid received from your financial aid office.
Many students and families use private loans to supplement other aid and to cover costs associated with the estimated family contribution, or EFC. In some cases, you can also use private loans to cover any outstanding balances owed to your school.
Do I have to file the FAFSA before I apply for a private education loan?
No, you are not required to file a FAFSA before applying for a private loan. This may make it more convenient to finance a large portion of your tuition bills. However, if you have filed, you may want to exhaust other forms of aid (such as federally guaranteed Stafford loans) before taking out a private loan.
How does the private student loan application process work?
After selecting the lender of your choice at SimpleTuition, you can either call the lender via the toll free number listed or click through to the lender’s site to begin an application. The approval and processing of applications varies greatly from lender to lender so it is hard to put a time-line to it. However, some lenders offer e-signature, which will allow you to complete the process online and receive your funds faster. Some banks will send or express mail the necessary documents to you to complete the student loan.
As of February 14, 2010, a new form is required before a private loan can be disbursed. In compliance with the Federal Reserve and Department of Education rules and regulations, students who borrow private loans are required to complete the Private Loan Self-Certification Form for each loan. This form is available at your financial aid office or directly from the Department of Education. As with federal student loans, you will be required to sign (or e-sign) a promissory note for each private loan whereby you agree to accept the terms of the loan (rate/fee/APR/repayment) and then repay it.
Why should I use a co-signer for a private student loan?
To increase your chances of approval and possibly improve the rate you receive, you are strongly recommended to apply with a credit-worthy co-signer. Some lenders require you to apply with a co-signer regardless of your income or credit rating. You'll need to look at each loan program for these requirements. Applying with a co-signer may also help you receive a lower interest rate and better terms on your loan offer.
Is there a credit check for private student loans?
Yes. Private loans are personal loans issued to individual borrowers by lending institutions. Much like a mortgage or an auto loan, your credit will determine if you are approved and also what rate (and possibly fees) you may receive. These loans are not guaranteed by the federal government and therefore are treated like any other consumer loan but with a special purpose. Additionally, most lenders will require the presence of a credit-worthy co-signer or co-borrower whose credit will also be checked.
Will applying for a student loan hurt my credit score?
Each time you apply for a loan, whether it is a student loan, a car loan, a mortgage or other, the lender may request your credit report from one or all three credit reporting agencies. Each time an inquiry is made, it is noted on your report. Too many inquiries may have a negative impact on your credit score. However, most recently developed credit scores recognize when a consumer is shopping for the best rates and either ignore multiple inquiries or count them as only one inquiry if they occur within a specific period of time. In such cases, shopping around will have little or no impact on a credit score.
What information do I need to apply for a loan?
In order to complete an application for a private student loan with most lenders, you will need the following information:
- Your full name, social security number and date of birth
- Your permanent address and the number of years you have lived there (no P.O. boxes)
- The amount of your monthly rent or house payment
- Your home phone number
- Your current occupation and position
- The name of your employer and how long you have been employed by them
- The business phone number of your employer
- Your gross annual income
- The contact information for a reference (name, address, home/business phone number)
- The name of your school (or the school the student for whom the loan is for is attending)
- The social security number, contact and employment information for your co-signer (if applicable)
Applying for federal student loans may require somewhat less information, but does require completion of the FAFSA.
Will the money from the private loan be sent to the school or to me?
When you apply for a private student loan, look for whether the loan is certified or uncertified. A certified loan requires verification by your school that you are not borrowing more than the total cost of education, less other aid received. Loan funds for certified loans are generally sent directly to the school. An uncertified loan does not require your school to certify any aspect of the amount borrowed (but will require verification of your enrollment at that school). The loan funds are usually sent directly to you. Make sure to speak with the financial aid office at your school for the school’s refund policy, including how and when the refund would be sent to you.
I don't have a co-signer. What do I do?
Obtaining a private student loan without a credit-worthy co-signer or your own positive credit history is very difficult. The following information about co-signers might help: Tips on Co-Signing a Private Student Loan.
Our advice would be to try one of the following:
- Talk to the financial aid office at your school, which could help you find options for financing your education.
- Ensure that you have already maxed out all of your federal financial aid options - including loans that do NOT require a co-signer, such as Stafford Loans. This means you need to fill out the Free Application for Federal Student Aid at http://www.studentaid.ed.gov.
- Consider investigating alternative sources of funding for your education, such as scholarship programs, work-study, and more.
- Lastly, you may want to consider reducing the costs of your education. Is it possible to take classes part-time so you can work more? Consider transferring to a lower-cost school, or to a school able to award more financial aid. Again, your school's financial aid office may be able to help here with a work-study job or other grant opportunities.
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- APR rates are subject to change and are based on credit history and borrower rewards.
- Undergraduate and graduate private loan borrowers may typically borrow annually up to the lesser of the cost of attendance or $30,000 ($40,000 for certain schools where the annual cost of attendance has been determined to exceed $30,000). Please note borrowing amounts and limits will vary by lender and loan type.
- With most lenders undergraduates may choose to defer repayment of principal and interest on private loans until six months after graduation or ceasing to be enrolled at least half time. Immediate repayment and interest-only repayment options are also available. Deferment periods may vary by lender and loan type.
- This does not apply to all lenders and loan types. Please check with your lender before you apply to confirm their payout process and timing.
