If you’re considering your college options, you’re also probably considering how to pay for it - and when it comes to paying for college, student loans seem like a necessity. But before you sign on the dotted line for any loan that comes your way, here are some steps to consider before you borrow:

Understand your different financial aid options. As you’re comparing financial aid offers from schools, it’s important to understand the difference between free money (like scholarships and grants) and money you have to repay (like loans). Even though one school may have given you $30,000 in financial aid for the school year, not all of that money will be free and a good portion of it may involve loans that you have to pay back. Take time to carefully examine the contents of your financial aid package before accepting it.

Borrow only what you need. Did you know if you’re offered a $10,000 loan, you don’t necessarily have to borrow that entire amount? Calculate all of your college costs before deciding how much you have to borrow, like cost of tuition, room and board, your ability for your family to help you out and how much your college gave you in your financial aid award. Doing this math can help you determine just how much you need to borrow regardless of how much you’re offered.

Borrow federal loans first. Federal student loans generally offer more protection than private student loans, especially if you face financial hardship or unemployment after graduation. It’s usually best to exercise your federal options before applying for private loans.

Understand the terms of any loans that you do take out. If you do have to borrow to pay for college, and especially if you have to borrow private loans, make sure that you understand the terms of your loans before you sign on the dotted line. Some loans you’ll need to immediately repay after college ends while others offer you a grace period after you graduate. And look out for loans with variable interest rates - a private loan that you borrow at 4 percent interest can seem like a great deal initially, until it spikes up to 8 percent.