Congratulations. You’re ready for college. Now, let’s talk student loans. A student loan is a type of loan used to pay for post-secondary education, and is repaid over time.
The two types of student loans are federal and private. A federal loan is funded by the government, typically with better fixed rates and repayment plans.
A private loan is funded by a lender, like a bank or credit union. You may qualify for additional discounts, however most students will need a cosigner for this type of loan. The quickest way to apply for any student loan is online.
For federal, you’ll need to fill out a free application for student aid, also called “FAFSA.” To qualify, you must have a high school diploma, a valid social security, and be enrolled in a certificate program. For private, you’ll need to complete an application on your lender’s site.
The loan amount will depend on your degree completion time. The average student loan amount per year ranges from $8,000 to $16,000. Your interest rate is how much the lender charges to borrow its money.
The higher the interest, the more you’ll pay in the end, so it’s important to compare rates. With any loan, you’ll set up a payment plan, and your monthly balance is usually determined by your yearly income. There is plenty you can do to minimize financial woes and be on your way to college.
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