If you’re thinking of borrowing a loan for college, you’ll want to evaluate all the details of the entire loan. MEFA’s Associate Director of College Planning and Content Creation Jonathan Hughes explains where to find a student loan to pay for college, how you can determine how much to borrow, and what to consider when selecting the loan. For more information on being a wise borrowing, view our article, Borrowing Tips for Student Loans.
Please note that this transcript was auto-generated. We apologize for any minor errors in spelling or grammar.
[00:00:00] If you’re facing a college bill in the fall and loan to part of your plan to pay for it, you may not be sure where to get started. So let me help you
pay whatever you can out of pocket before borrowing. Use savings. Contact the financial aid office about using a monthly payment plan, even if it can only afford a small amount. Now, anything that you can pay outright is something that you don’t have to borrow. It’s something that you won’t be paying interest on for years afterwards, and a lower loan balance now means a lower monthly payment on any loans that you do have to borrow.
Next, make sure the student has accepted their federal student loans first. These are typically the only loans that undergraduate students will be able to qualify for without a co borrower, because there’s no credit check to be approved if you filed the FAFSA already. These are part of the financial aid package.
And there’s still time to file the FAFSA if you haven’t yet. Done so. Finally, many of you will still be [00:01:00] facing a balance due, and you may be looking to borrow private loans. While there are a lot of options, it may feel like there are too many. So let’s look for a loan to fit you by answering a few key questions.
Do you want to begin the monthly payment after the student leaves college, or begin repaying immediately? Do you want a fixed interest rate? Do you want the student and the parent to share responsibility or for the loan to only be the parent’s responsibility? Do you want options for the co borrower to be removed from the loan at a certain point in the future?
Once you know the answers to these questions, you can start to narrow your choices. Some colleges have a list of lenders that they post to their website. You can also visit third party student loan comparison sites that will allow you to look for the loans that give you the lowest monthly payment and lowest interest rate.
You can also visit mefa.org for a complete listing of our options. As always, good luck and if you need further help, here’s where you can find [00:02:00] us.
