The Best Times to Apply Online for Student Loans

Choosing to apply online for student loans can save you hassle and also cut back on processing time for your loan applications. No matter how you are applying, by mail or online, there are some times when you will have a better chance at approval than others. This typically relies on the economy at large, as well as the trends in education at the time of your application. Your personal application will also appeal to lenders in a unique way.

Economic Factors in Student Loans

The economy and the credit market affect all aspects of lending, including student loans. Generally, during a recession lenders are not as willing to make loans. This is in response to a two-fold problem: first, they have lost a lot of money on risky loans when the market collapsed and are risk-averse at this point; second, since they lost money and do not have the cash to hand out freely. You will be competing for less loans on the market. Furthermore, you will have to appear less risky in order to secure a loan. In an economic boom, on the other hand, lenders are typically very happy to hand out loans to qualified persons. A solid credit score will likely be enough to get you a competitive student loan rate. Applying online is best during a strong market because you will not need to submit as many supplemental documents in order to receive your funds.

Educational Trends in Student Loans

If there are a lot of students applying for loans at the same time you are you will face more competition for the funds. For example, applying in the summer before a fall term means your application will reach the lender along with hundreds of others. These waves of high application periods are not just seasonal. Year by year, colleges and universities see large fluctuations in applicants. For example, if the economy is bad, many people will consider going back to school. Some will have lost jobs, and others will simply be attempting to raise their compensation in the future through a higher degree. When joblessness is low and salaries are high, on the other hand, going to school does not seem as attractive, and less people will be applying for loans.

Personal Factors in Student Loans

Your own financial profile will also affect your ability to achieve a loan. Applying when you have no income and no credit history will require you to spend more time and energy seeking the right lender. It may be best in this situation to apply in person and discuss options with your banker. However, if you have a very strong financial history, applying online may be sufficient. This usually applies to people who are going back to school after working for some time. It may also apply to people who are planning on securing the loan against an asset, such as a home or 401K fund. Applying online is a better option if you feel you will have an easy time sourcing your loan.

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