5 Tips for Applying for Private Student Loans Online

Applying for student loans online is possible for both government and private loans. Depending on the loan program you are considering, however, you may need to provide supplemental materials through the mail. Doing the work online will save you time and will reduce the time for processing your application on the lender's side.

#1 Look to Lenders you know

If you want to truly reduce the time it takes to source your loan, then you should consider working with a lender you already have a relationship with. For example, if you have an account with your local bank, check the bank's website for loan information. You may find account holders are given special privileges or priorities if they also take loans from the organization. You may also find there are incentives for you to continue banking there, such as special bank accounts and credit cards for students.

#2 Know your Loan Amount

You will need to know how much you need for school prior to seeking a loan. The office of financial aid at your college or university should be able to provide you with this information. You should ask not only about tuition but also about living expenses and other education costs. Some lenders will help you cover the cost of living while you are a student. Others, like government lenders, will only cover those costs directly related to your education. Know these numbers before applying for loans as many lenders will have limits.

#3 Beware of Terminology

You need to know more than just loan amounts and interest rates to determine if you are getting a good offer. Terminology in loan terms is important. For example:

  • Know the difference between a fixed rate and an adjustable rate; it is usually best to seek a fixed rate
  • Be aware of prepayment fees; this means you will have a charge if you pay off your loans early
  • Look for a grace period; this means you will not have to start repaying loans immediately upon graduation
  • Opt for different payment choices; for example, graduated repayment means you will face lower payments in the beginning of your loan

#4 Do Not Provide Personal Information

You will have to provide personal information to actually move forward with an online application. However, if you are simply looking for information or getting a quote, you are probably not on a secure server. This means you need to be very protective of personal information. In particular, guard your address and social security number. People with this information can access your financial identity. Only provide such information if you are on a secured server and trust the lending institution. Even then, only do so at a personal computer.

#5 Be Flexible

You may have an idea of the loan you want, but the truth is you will have to see what is available before you make a final decision. If you are willing to apply each semester instead of all up front, for example, you may get better loan terms and interest rates. You may have to place collateral for the loan, get a cosigner or choose another option you are not initially favoring. Ultimately, negotiating a loan is about compromise.

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