When it is time to go off to college, many people need to secure
additional funding. A higher education can be quite costly, but it
is certainly a worthwhile expense. When it is time to consider
looking for student loans, there are a few things to keep in mind.

The most important thing you will need to do is to determine how
much money you need to borrow. Since it costs money to borrow
money, you dont want to borrow more than you need. On the other
hand, you need to make sure to borrow enough to cover your
expenses.

Have a frank conversation with your family. Are they planning on
contributing to your educational expenses? If so, how much will
they cover? And what portion of your expenses do they expect you to
be responsible for?

Then you need to come up with a realistic budget. This should
include all your expenses: tuition, housing, food, transportation,
books, entertainment, supplies, clothing, and travel. Then factor
in the amount of money you will be getting from your family and any
salary you expect to earn, along with any grants or scholarships
you have earned. You need to have an understanding of how much
money you will spend versus what you will be bringing to the table
in the form of salary, savings, and grants in order to be able to
make an informed decision about how much you need to borrow. There
are a number of financial calculators on line which can help you
calculate that amount. Your college of choice will also most likely
be able to help you in determining how much money you need. Seek
out their financial aid offices for assistance.

Once you have come up with the amount you want to borrow it is time
to start shopping around for loans. You will want to research the
type of loans that are available to you. Are you eligible for
student loans? Or do you need a private loan? Perhaps your parents
will be getting a loan to pay for your education.

Usually students need to supplement scholarships and grants they
may have earned. Private education loans are often less costly than
other types of loans. This means the private education loan will
cost less over the lifetime of the loan. It is important to
carefully research the terms of any loan you are being offered.

After you have received a few loan offers compare the interest
rates and other terms to select the best loan for you. If you are
offered a variable rate loan, does it have a cap as to how high it
can go? When will you need to begin making payments? What are the
penalties for late payments? Will your loan be convertible if you
decide to attend graduate school upon commencement?

If you are having difficulty securing a loan under your own credit
score, you may want to ask your parents to co-sign a loan for you.
Often they will have a higher credit score than you and that will
result in more favorable loan terms, which means you will pay less
for your loan over time. Bear in mind however, that the co-signor
is ultimately responsible for the loan if you default.

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This entry was posted on Wednesday, April 15th, 2009 at 11:59 am
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