How to Apply for Private Student Loans

To apply for student loans, first fill out the FAFSA. Then the steps you take depend on whether you’re taking out federal or private loans.When it comes to student loans, remember you don’t always have to borrow. But if you need to, you should start with federal student loans, then turn to private loans to fill the gaps. You might already know how much you’ll need from your financial aid letter, but understanding what your options are can help put your mind at ease.

How to apply for federal student loans

1. Know your federal loan options

One of the first steps to take to secure a student loan is to know which type of loans are available to you.

  • Direct subsidized loans: This type of direct loan is available to undergraduate students and awarded based on financial need.
  • Direct unsubsidized loans: These loans are available to undergrads and grad students. They don’t require proof of financial need.
  • Direct PLUS loans: These loans are available to parents of undergrads as well as graduate or professional students. The borrower’s credit history is considered for a PLUS loan. Just keep in mind PLUS loans can have higher interest rates, so be sure to compare private student loans first, so that you can pick the best one for your situation.

Before borrowing, make sure you do your research and understand the limits on student loans.

2. Prepare any documents and information you might need

Before you actually apply for student loans, you’ll need to have some basic information handy. Here are some documents and information you should prepare to have for the Free Application for Federal Student Aid (FAFSA):

  • Social Security number
  • Birthdate
  • Current address (for student and parents)
  • List of all the schools you’re considering attending, including the school’s information like name, address, phone number, and your major
  • Tax returns and other tax information for your parents (or yourself if you’re independent — though that’s hard to qualify for)
  • Other income information like child support or any other assets like businesses or investments
  • Adjusted gross income (AGI) from the last two years
  • Any gift aid received like scholarships or grants

There might be other information needed for your loan application process, depending on your situation. But just make sure you have all of your important financial papers and information before moving onto the next step.

3. Fill out the FAFSA

Every student borrower should fill out the Free Application for Federal Student Aid (FAFSA). Even if you don’t think you’ll be eligible for most federal financial aid, you might be surprised to find that you are eligible for reward money or federal loans.

Even if you are not eligible for scholarships or loans due to financial need, you still might be offered a direct unsubsidized loan through your school. It is important to fill out the application as early as possible to maximize your funding. Also, try talking with your school’s financial aid department for a better idea on what type of loans you are eligible for.

4. Review your Student Aid Report

Next, you’ll want to review your Student Aid Report (SAR). If you provided an email address when you filled out your FAFSA, you should automatically be emailed a copy of this report. If not, just follow these steps to view it online or print a copy:

  1. Go to
  2. Click “Log In”
  3. Enter your FSA ID
  4. Go to the “My FAFSA” page
  5. Click “View or Print Your Student Aid Report (SAR)“

Typically, you’ll be able to access your SAR within two weeks of submitting the FAFSA. Your SAR will be sent to the schools you listed on your FAFSA. They’ll use this information to decide which type of and how much financial aid you’re eligible for.

6. Review your financial aid letter

After receiving your FAFSA, any schools you’ve applied and are accepted to will send you a financial aid award letter. Make sure to thoroughly review the letter so you know how much financial aid you’re eligible to receive.

The letter typically includes your total cost of attendance, Expected Family Contribution (EFC), and the loans and other aid you qualify for. Your net cost will be the total cost of attendance, minus whatever gift aid you qualify for.

How to apply for private student loans

If federal loans don’t cover all of your college needs, then you might need to fill in the gaps with private student loans. Make sure you have any documentation you might need and you’re ready to explore your private loan options.

Before you start, it’s important to compare rates from multiple lenders, so you’re confident you’re finding the right loan for your situation. Though you should always take advantage of federal loans first, once it comes to PLUS loans, rates on private student loans can be even more competitive.

Even if you have excellent credit, you might not qualify for a private student loan without a cosigner. If you do qualify, having a cosigner can greatly increase your chances for acceptance and even get you a lower interest rate which could save you money. Nearly 94% of all private student loans are taken out with a cosigner.

Credible makes it easy to compare rates from multiple student loan lenders with or without a cosigner. You can fill out just one simple form and it only takes two minutes.

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