Choosing a Loan

Once you've decided to try to get a student loan to help finance your education, you will have to decide what type of loan (or loans) you want to apply for.

The Federal (Perkins & Stafford) Loans

The Federal Perkins Loan Program provides low-interest loans to help needy students finance the costs of higher education. There are over 1,800 colleges in the U.S. that offer Perkins loans. Stafford Loans are federal student loans made available to college and university students to supplement personal and family resources, scholarships, grants, and work-study. Nearly all students are eligible to receive Stafford loans regardless of credit. Stafford loans may be subsidized by the U.S. Government or unsubsidized depending on the student's financial need.

In order to apply for a Perkins or a Stafford loan, you will need to fill out a Free Application for Federal Student Aid, or FAFSA. This application will request detailed information on the prior year's tax records, so you will want to have your returns or the returns of your parents handy before starting the application. This application will have to be renewed every year in the Spring after your taxes are filed.

Private Student Loans

As with any other type of loan, many lenders out there offer student loans as well as their standard offering of mortgage, equity, auto or personal loans. The difference between these types of loans and the federal loans is how difficult they may be to attain. Federal loans are based on financial situation: if you have need (low income) you will most definitely qualify. Private loans, on the other hand are credit-based, so you or your parents applying for you need to have a good credit score in order to be approved for a private loan.

Do not forget you have to pay back student loans! For more tips look at the guidelines we have given for paying back student loans.