If this is the first time you are applying for a loan, the process may be intimidating. However, beginning the process with some background knowledge will not only help you feel more comfortable, but potentially speed up the process. Whether you are applying for a study abroad loan or international student loan, here are 3 important tips to make applying for a loan a piece of cake.
- Calculate Your School’s Cost of Attendance – If you are taking out a private student loan, you will be asked to provide information about the school you will be attending. Make sure you have all the contact information for your chosen university such as: the name, address, school term, major, etc. For a private student loan, the lender will cross check to make sure that your requested amount does not exceed your school’s cost of attendance (COA). Although your school’s COA is the maximum amount you will be eligible for, remember that you will be paying it all back so if you can take out less, it’s better to take out only what you need.
- Have Your Co-Signer Ready – A co-signer is essential for all international students applying for an international student loan. However, a co-signer can be useful for US citizens applying for a study abroad loan as well. When you decide to study abroad you may not have enough of a credit history established, which shows lenders that they can’t trust you to pay them back. This is why a co-signer is so important. This person, in essence, fills out the application with you and gives the lender a guarantee that if you are unable to make your loan payments he/she will take the responsibility. Choosing a co-signer with good credit can also work in your favor, allowing you to receive better interest rates from the lender.
- Collect All of Your Financial Documents – When applying for a loan you are asking for money and before a lender decides to approve your application they need to have a good idea of your financial standings. As mentioned above, you will probably need a co-signer so it is important to have all of you financial documents and that of your co-signer available. If you or your co-signer have filed taxes, having that information on hand will make the application process easier. The breakdown of financial information that you normally will be asked to provide includes: gross income, do you rent or own, monthly housing payments, etc.
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Summer is now in full swing and most of you probably have already made your final decision on what university you will be attending for the 2016-2017 academic year. For those of you who haven’t officially accepted enrollment, be sure to do that as soon as possible! Although you have now finished with all your college applications, the next step is starting your loan application. Do not fret! It may sound daunting, but here´s a break down of what information you’ll need to make your loan application a breeze.
- How Much Money You Want to Take Out
Before you can even dive in to begin figuring out which loan is the right fit for you, you´ll need to know how much you are going to take out. Although it does require some planning and number crunching, having this amount ready to go before you start looking at different lenders will make your decision process a lot easier and could save you money. Now you may be asking yourself, ¨how much should I borrow?¨ The key is to try and borrow the amount that you will realistically need and not an excessive amount. When receiving your student loan it may seem like it´s free money, but you must remember that it is not! If you borrow more money than you need your monthly payments will be higher, any financial aid you were given may be reduced, and you may be in debt longer than you would like. When calculating how much to take out as a loan, take into consideration the following: your university´s cost of attendance, funds in the case of an emergency, unexpected expenses, possible income, and how much money you have saved up.
- Your Personal Information
Now a days most lenders have made filling out your loan applications simpler, by allowing you to fill it out and submit it online. However, to speed up the process it is best to sit in front of your computer with all the information you’ll need right off the bat. This will prevent you from having to pause filling out the application to go in search of missing information. Below is a list of what personal information you should have prepared.
- University name, address, and telephone number
- Your major, year (freshman, sophomore, etc.), school term
- Your current home address and telephone numbers
- Housing information: rent or own, monthly payment amount
- Gross income
- Personal References: name, occupation, relationship, contact information
Having a cosigner on a student loan application is usually reserved for and required for non-US citizens, however US citizens or permanent residents can also benefit from adding a cosigner to their application. A cosigner is a person who joins your loan application and legally agrees to take responsibility for your loan payments in the event that you are unable to pay them. For international students, who are non-US citizens planning to attend a US university, having a co-signer is required. However, US citizens or permanent residents can choose to add a cosigner in order to increase their chances of loan approval and to receive better interest rates.Because your cosigner must be a US citizen or permanent resident (green card holder) you will need to have their personal information on hand such as name, address, telephone number, and social security number. It is important to inform your cosigner that they may have to log in themselves to fill out and sign a part of the loan application.
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A crucial part of the education loan process is determining how much money you are going to borrow. Some students begin to run wild with the idea of receiving a loan check, but it is important to be conscious that a loan is not free money – you will have to pay it back. This being said, the less you borrow the better. There are many ways to minimize the amount that you will need to take out as a loan, but the first thing you should find out is your university´s cost of attendance (COA). Read the rest of this entry »