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Student Loans

Started by ngadang2810, July 16, 2019, 12:56:40 am

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ngadang2810

My cousin is about to start college in the fall at our local state school.  He was asking my advice on student loans.  I like to think I'm good with money, but I honestly have no idea what to tell him because its been so long since I was in college and also my parents paid for it (it was relatively cheap since I went to state school and lived at home)
I guess what I'm asking is, how does he go about getting private loans?  Is is like getting an auto loan from a bank where you look online at the best rates each bank has?  How does the approval process for loans work?  Sorry to be so vague, I just have no idea how these loans work but I hear everyday how awful private loans are and I don't want him to get scammed.
Thank you very much

TheCollegeInvestor

First, read this guide on how to pay for college. Student loans are the last thing you want to get: https://thecollegeinvestor.com/21877/pay-for-college/

Second, when it comes to loans, the hierarchy should always be:
Federal Direct Subsidized -> Federal Direct Unsubsidized -> Private loans (only if the ROI of your college degree allows for it).

Borrowing too much to pay for college is the worst financial move you can make.

How to do it?

For Federal loans, you fill out the FAFSA, and you'll get an email from your college's financial aid office telling you that you can "accept these loans". Those are just Federal.

If you still need private loans (which should be rare for undergrad at a local state school), you just go to various banks and lenders and apply. Here's our recommended list: https://thecollegeinvestor.com/22108/best-private-student-loans/

Good luck!

Yogeesh B P

Quote from: ngadang2810 on July 16, 2019, 12:56:40 amMy cousin is about to start college in the fall at our local state school.  He was asking my advice on student loans.  I like to think I'm good with money, but I honestly have no idea what to tell him because its been so long since I was in college and also my parents paid for it (it was relatively cheap since I went to state school and lived at home)
I guess what I'm asking is, how does he go about getting private loans?  Is is like getting an auto loan from a bank where you look online at the best rates each bank has?  How does the approval process for loans work?  Sorry to be so vague, I just have no idea how these loans work but I hear everyday how awful private loans are and I don't want him to get scammed.
Thank you very much