Private student loans offer a solution for many students who’ve exhausted their savings and federal aid eligibility. These loans provide an alternative source of funds that can be used to pay for tuition, books, fees, supplies and housing.
Before you submit your private student loan application, it’s important to take the time to understand common application mistakes.
Private Student Loan Application Mistakes
Mistake #1: Applying for private student loans first.
Every college student should complete the Free Application for Federal Student Aid (FAFSA). Some colleges and companies that offer scholarship awards require completion of the FAFSA. This helps determine eligibility for specific scholarships. Additionally, don’t assume your household makes too much money to receive federal assistance. You may be eligible for various types of federal aid such as grants or work-study programs.
Mistake #2: Failing to ask about tuition reimbursement.
Not every employer offers tuition reimbursement or employer tuition assistance programs. However, those that do, give eligible employees or their family members an average of $5,000 for completing college-level coursework. Moreover, this funding does not need to be repaid and can help you graduate with less student loan debt.
Speak with the human resources department to learn about application details and eligibility requirements.
Mistake #3: Assuming college tuition is due in full.
Some colleges offer tuition installment plans that may enable you to split your tuition balance into multiple payments with zero interest. Consequently, the amount you need to borrow in federal and private student loans could be reduced.
Mistake #4: Forgetting to re-apply for scholarships.
Many college scholarships are awarded annually and require the student to submit a new application each academic year. If you miss the deadline, you may lose out on this source of free money and need to borrow more to make up the difference. Therefore, you should speak with a scholarship administrator to confirm when you should re-apply for any awards you are receiving.
Mistake #5: Leaving blank spaces on applications.
While filling out your applications, be sure to mark any question that doesn’t apply to you as “Not applicable” or “N/A.” Leaving answers blank makes your form incomplete. This could slow down the application processing time, potentially delaying funding approval.
Having a parent or a trusted individual review your applications could help ensure you answered every question.
Mistake #6: Submitting inaccurate information.
Inputting an incorrect Social Security or driver’s license number is usually an innocent mistake, however, it could result in a loan denial. To avoid this, you should double-check your information and, also, have a trusted individual review your applications before submission.
Mistake #7: Providing false information.
Intentionally providing incorrect information on a loan document or submitting fake supporting documentation can result in more than a loan denial. This is considered fraud, a crime that’s punishable under criminal and civil law.
Lenders are aware that applicants may attempt to falsify information related to income, debt, and employment. Financial institutions use various software programs to flag inconsistencies. They confirm application information by using public records, credit reports, and employment verification services.
Mistake #8: Requesting a loan amount that exceeds the cost of attendance.
A private student loan isn’t a blank check. There are limits to the amount you can borrow. Some lenders require written confirmation of the federal awards you’ve already accepted. Others may speak with your school’s financial aid office to ensure your loan request doesn’t exceed the cost of attendance.
Mistake #9: Forgetting that a cosigner can help with private student loan approval.
If you have little to no income or credit history, a cosigner can help you secure a private student loan. When a person cosigns your application, they allow the lender to consider their financial and credit information before making a credit decision. It should be noted, the cosigner shares legal and financial responsibility for the loan.
Mistake #10: Waiting until the last minute to apply.
Choosing the right offer for your specific situation is important. Start your loan search early to have ample time for comparing interest rates and repayment terms. Rushing an application could cost you thousands of dollars over the life of the loan.
Low-interest rate private student loans offer a convenient way to borrow the funds you need for college. As a result, you’ll be able to pay for educational expenses when you’ve exhausted other financial aid sources. LendKey offers variable and fixed-rate private student loans to help you achieve your dreams of a higher education. Apply today!