Getting a student loan is the requirement of almost every aspirant for higher studies. The time required to get a loan depends upon some of the factors. The main factor is where you get the loan. If you take a loan from the federal, then it takes more time. And if you get the loan from private lenders, then your loan is processed faster than the federal loan.
In this guide, you will learn the various ways by which you get a student loan effectively. In addition to that, we recommend you to get a federal loan because it has lots of benefits over the private lender’s loan. Also, we describe the whole process of the student loan. In addition to that, the steps by which you can get out of a loan fast.
Time required for the student loan
Time for the student loan depends mainly on the firms that give the loan. Mainly two firms work in student loans. The first is a federal loan, and the second is the private lender’s loan. Now we explain the functioning and the timing of both the loan providers one by one.
Federal student loan
A federal student loan is a student loan that the U.S. government guarantees. In addition to that, these student loans are at a very low-interest rate. These loans are meant so that the student completes his education without financial problems. Students use these loans in buying textbooks, tuition fees, hostel fees, library and laboratory fees. And also the day to day expenses of the schools and colleges. Usually, it takes around a few weeks to a few months for the loan amount to come into your bank account or in the account of school and college.
Loan process of federal student loan
The loan process of a federal student loan starts when you file a loan application. This loan application is free of cost. And you can file it from the official website of federal student loans. You have to file a free application for federal student aid (FAFSA). Your application is processed within minutes. And now you have to wait for the approval of the application.
Suppose you apply the loan amount to disburse in your bank account. Then it takes around one month. But in case you want to transfer the whole loan amount into the account of the college or the school. Now it takes around a few months for the status of the application. Then it takes more time than usual because the school or the college has its process, which takes time to process the loan amount.
When the school receives the loan amount, the school makes the list of your expenses for the whole year. And if the same amount is saved after all your expenses. Then the school give it back to the federal loan department. And the same amount is deducted from your principal loan amount. That thing is beneficial for you. And in the long run, you save some cash on your loan amount.
Suppose your loan application is rejected due to some reason. Then you have to go for a private loan. There are lots of benefits of the federal student loan as compared to the private loan. But remember one thing the federal loan is made for the welfare of the people. And the private loan is made for the welfare of the private loan provider. So your priority is the federal loan.
Private student loan
A private student loan is a student loan that is provided by private lenders other than the Government loan providers. The interest rate on the loans of private lenders is higher than the government agencies providing the loan. So you have to remain away from these types of loans. In addition to that, they charge higher prepayment fees, and the loan processing fees are also high. If you default on the private loan, you may pay higher fees than your EMI (Equated Monthly Installment).
Loan process of private lenders
The loan process of private lenders is fast than the federal student loan. You fill the student loan application online. And your loan application is processed within minutes. In addition to that, they will inform you about your loan approval or rejection within some days. There are almost two to three per cent chances that your loan application will disapprove.
After you get approval from a private lender about your student loan, the next step is that they contact your school or college where you want admission. Then they disburse the loan amount to your bank account or in the account of school or college, as you mentioned in the application. After the disbursal of the loan amount from the next month, your EMI will start as a private lender does not wait for your full-time process.
The article concludes that you have to take a student loan from a federal government loan provider. But if your loan application is rejected by the federal, you have the option to go for the private lender for any reason. But you have to do some research on the market. To check which loan provider gives you the best and the lowest interest rate. Also, check for the fees and other processing charges of the loan. It takes around six weeks if you take a student loan from the federal, and it takes around three to four weeks if you take a loan from private lenders. I hope you like the article.