If you are a student, then you may need to take a student loan to convey the cost of your studies. But for that, you have to know the total procedure of a student loan.
You may ask how long does it take to get a student loan? Well, it’s good to ask for the duration of the loan. If it takes a long time to get a loan, then it will be good for nothing.
So, if you want to get your answer then please stay with us a little more…
How long does it take to get a student loan?
If you are seeking help for financial aid, then it will be the most common question. There are a few steps you need to follow such as loan application, loan approval as well as loan disbursement.
After following this entire process, you will be able to get the loan. The process may take a few weeks to a few months depending on the category of the loan.
There are two different kinds of loans. Such as-
1.Private student loans
The lenders of private student loans have some rules of their own to approve the applications of loan. There are some students who want the process of application, approval, and disbursement of loan to be as easy and as early as possible.
There are some cases in private student loans, where you will be able to get the funds faster in comparison to the federal loans.
Before taking any loan, you should look around and do proper research on this. Try to consider the lenders as many as possible of the private student loans. This will help you to find out the appropriate loan for yourself.
It will take a few minutes to get the approval of the private student loan after submitting your application properly. But if the application needs further review, then it may take as long as two weeks.
Then the lender will notify you, whether you have been approved for the loan or not. In some cases, you may need to meet them in person.
2. Federal student loans
This is another loan for a student. First of all, you will need a free student loan application for this kind of loan. This is also called FAFSA or Federal Student Aid.
After you are done with your application, then it will proceed. This will take from three days to five days for processing.
After processing your application, your SAR or Student Aid Report will be sent to your school that is listed on the FAFSA. Now you have to wait for three weeks after submitting the FAFSA.
Within this period, you may receive a letter from your school which is called a financial aid award letter. But you should keep in mind that, the process is different for different schools.
If you face any problem like if you don’t receive any letter, then try to contact the financial aid office.
At the beginning of the term, federal student loans are mainly disbursed. After doing all the payment for the student housing, fees, tuition, if there remain any left-over funds, then most of the colleges refunds them.
In between two to three weeks of your receiving the federal student loan, the colleges will refund that remaining balance to you. Note that, there are some differences, some schools add a delay of 30 days as a protection for the borrowers for the first time.
You wanted to know how long does it take to get a student loan? I hope, in this section, you got your answer.
3. How to check on the loan status?
Well, do you know how to check on your loan status? This is really an important topic. You must have a complete idea of it. So, in this section, I will try to discuss the ways in which you will be able to check on the loan status.
As there are two different kinds of student loans, so I will discuss both of them.
4.Private student loans
In the case of private student loans, you have to contact the lender for checking your loan status. You should always keep in mind that, as you are applying for a private student loan, it is a great deal to make a comparison among as many lenders as you can.
It will take a little amount of time like three minutes to see the rates with Credible from more than one lender. It is not only a faster process but also an easy way. Moreover, this is not going to affect your credit score.
5.Federal student loans
If you have taken federal student loans, then you must have a FAFSA account. With the help of that account, you can easily see your loan status.
For checking the FAFSA status, first of all, you need to log into your FAFSA account. Then you need to look at the page named “My FAFSA”. After the approval of federal loans, check with the servicer of the loan for the status of the disbursement.
It is good to keep up to date information. If you need any help or for any kind of queries, you can email or call the financial aid office. They will help you with all kinds of information.
How to get government loans?
It is the best bet for students to get loans from the sources of government. The government loan for students contains a small amount of interest rate.
Moreover, when you are in school as a student, then you can be benefited as there is some interest which may be subsidized on behalf of you.
Government-backed loans contain different kinds of benefits such as, they contain flexible repayment structures and they are so easy to be qualified for.
But the government loans contain some drawbacks. Some of those are- you can’t cover all of your expenses with those loans.
Moreover, you can’t borrow as much as you want. In simple words, there are some limitations on the amount you can borrow. But if you need more than that limited amount, you will need to look for it elsewhere.
How to get a loan from the bank?
Do you know the ways to get a loan from a bank? It’s very much important for every person to know the ways of getting a loan. Well, if you have no idea about it, then don’t worry at all. In this section, I will discuss all the steps to get a loan from the bank.
Check the credit score:
The first step to get a loan from the bank is to get as well as check your credit score. Nowadays you can easily check it at any time on different sites for free like Credit Sesame, Credit Karma, as well as Credit.com.
Let me know that, for taking a loan from a bank, you don’t need to bother about any perfect credit score of 850. Your credit score is seen by the lenders as an intimation of trustworthiness.
As you are a buyer, they see your credit score so that they can adjust the offers properly. So, it will be better for you, if you get a higher credit score.
1. Pull the credit report, if something seems amiss:
In your credit report, the credit score monitors all the credit-related activities. In accordance with the FTC or Federal Trade Commission, you are permitted one copy of the credit report each year.
You can receive them without any cost from the credit reporting companies which are nationwide. Those companies are- Equifax, TransUnion, and Experian.
Well, there are several platforms from which you can get your credit report but you will have to pay for that. On the other hand, annualcreditreport.com is that kind of site in which you can get your credit report so easily and you don’t need to pay for that.
But in such a case, you will need to verify your identity by providing your name, SSN or Social Security Number, address, Date of birth, and so on.
2. Understand that the loans can boost your credit score:
According to Young, “Taking out a personal loan to pay down high-interest credit card debt can boost your credit score by lowering your credit utilization ratio.”
“That’s how close you are to hitting your limits on your credit cards. Try not to use more than 30% of your limit on any card.”
Moreover, if you have no instalment loan, then a personal loan can boost the credit score. Young says, “That’s because your credit mix makes up 10% of your credit score.”
3.Understand the types of personal loans:
Well, personal loans are of two types. One is secured and the other is unsecured. The unsecured loans are not supported by any collateral such as a house or any personal assets.
The banks decide whether they will grant you the loan or not. They make this decision depending on your credit score as well as your financial history.
If you fail to get unsecured loans, then the lenders may offer you the secured loans. The secured loans are leveraged against the accounts or assets you contain at the bank or anything tangible such as a car or a house.
Auto loans, home equity loans as well as mortgages are considered secured loans. Keep in mind that, if you take any secured loan using your car or home or other things as collateral, then you will have the risk to lose that.
Make sure that you can get personal loans from your bank:
There are some banks that don’t give any personal loans, so you need to ensure whether your bank provides a personal loan or not.
1.Get the paperwork:
This is the most challenging part of getting a loan from the bank. According to Prakash, “Getting a bank loan can take weeks, even months. The main reason it takes so long is that you have to submit a bunch of paperwork.”
In the paperwork of your loan, you may need-
- Pay stubs
- Photo ID
- Tax returns
- Mortgage history
- Documentation of financial accounts
- Proof of collateral
2.Try to get preapproved:
Whenever the lender extends any unofficial offer on any loan, that’s called preapproval. The preapproval will tell you (if you are the borrower) about the loan terms, amount, as well as repayment schedule. This process also includes a credit history evaluation as well as an application.
3.Know all the terms:
The instalment loans are known as personal loans. When you are taking any money as a loan of a fixed amount and pay this back in monthly instalments with interest, then it is known as instalment loans.
The terms of these kinds of loans are on a monthly basis and the range can be from 12 to 96 months. After paying it back with all the interests, the loan is considered closed.
Make a proper plan for paying the loan back:
After getting a loan, you should make a plan to pay it back properly. It may depend on your monthly salary and consumption.
“Your payment history makes up 35% of your credit score,” says Young. “If you continue to make on-time payments and reduce your total amount of debt, your credit will improve” so next time it will be easier for you to borrow money.
“How long does it take to get a student loan?” I hope, by now you have got your answer. In this article, we have discussed all the student loans.
Besides, we have also discussed different types of student loans including government loans, and the ways to take them. Still, if there is any confusion, let us know. We will try to help you.