What’s the time frame for getting a student loan?
Our goal here at Credible Operations, Inc., NMLS Number 1681276, referred to as "Credible" below, is to give you the tools and confidence you need to improve your finances. Although we do promote products from our partner lenders, all opinions are our own.
Getting a student loan could take a few weeks to a few months, depending on whether you choose federal or private funding. (iStock)
Getting student loans can be a lengthy and sometimes confusing process that varies depending on whether you’re taking out federal or private loans.
It can take a few weeks to a few months to get a student loan, so it’s important to plan ahead to ensure you’ll have funds when your tuition and other costs come due.
Here’s a rundown of the timeline when taking out federal or private student loans.
How long does it take to get a federal student loan?
Taking out a federal student loan follows a pretty standard timeline.
First, you’ll need to fill out the Free Application for Federal Student Aid (FAFSA). You can find this form — which needs to be completed every year — at studentaid.gov. The results of your FAFSA will determine how much (if any) need-based aid you qualify for, including federal grants, work-study programs and federal loans.
Each state has its own FAFSA deadlines so be sure to look into your state’s requirements long before you’ll need the money. Once you complete and submit your application, it will take approximately three to five days to process.
Once your packet has been processed, a Student Aid Report (SAR) is sent to the schools you listed on the FAFSA application. You’ll generally receive a financial award letter from those schools within three weeks of sending in your FAFSA. However, each school has its own time frame for accessing FAFSA information.
This financial award letter will outline the need-based aid you qualify for, as well as any other aid or programs the school plans to offer to assist with your tuition and expenses.
Once you’ve seen the federal financial aid available to you, you’ll need to accept the grants and/or federal loans offered. Before loan funds can be disbursed, you — and your cosigner(s), if applicable — will need to sign a Master Promissory Note.
This promissory note is a legal contract. Signing it demonstrates your promise to repay those student loan funds (plus any interest and fees) to the U.S. Department of Education, according to the original loan agreement.
Once the loan has been accepted and the promissory note signed, all that’s left to do is wait for the funds to arrive. Generally, the earliest federal student loans are disbursed is 10 days before the first day of the semester for which the funds are intended.
It’s important to note that first-time borrowers who are first-year students may see a longer delay. In this case, you may have to wait for funds until 30 days after your classes begin.
How long does it take to refinance a federal student loan?
Once you enter the repayment period, you may decide to simplify your federal student loans. This can be done either through a Direct Consolidation Loan or a private refinance.
Consolidating your federal student loans is a fairly straightforward process that generally takes less than an hour to complete. Through this free process, you’re able to combine all your federal student loan debt into one loan with a fixed interest rate and one single monthly payment. The new interest rate will be the average of the interest rates on the federal loans you’re consolidating, so it may not necessarily be lower than any of your current rates.
To refinance your federal student loans, you’ll need to go through a private lender. This means you’ll lose out on certain benefits only offered to federal loan borrowers, like student loan forgiveness. The private loan process may differ from one lender to the next and can take anywhere from one business day to a week or more.
How long does it take to get a private student loan?
If you go the private student loan route in order to fund your education, the borrowing experience varies by lender but is generally shorter than waiting for federal student loan approval and funding.
It can take just a few minutes to two weeks to get approved for your private student loan, and a FAFSA isn’t usually required (though the lender will pull your credit).
Getting your funds certified by your school can take another couple of weeks. It can also take up to a couple of months for the lender to actually send the money to your school.
Credible allows you to compare rates on student loans from multiple lenders at the same time.
How long does it take to refinance a private student loan?
Refinancing can be a great way to simplify your private student loans, reduce your interest rate(s) and get out of debt sooner. Private loans also don’t include any federal repayment benefits (like loan forgiveness), so you won’t lose those when you refi.
The refinance process is very similar to the loan application process. You’ll shop around, then choose a private lender and apply for a refinance loan. This can also be used to consolidate two or more of your student loans.
The lender will run your credit (and that of your cosigner, if applicable) before giving you a decision, which will include repayment terms and a variable or fixed interest rate. Once approved, you’ll need to sign for your loan, which can often be done online in just a few minutes.
Depending on the lender you choose, you can complete the entire refinance process in as little as an hour or up to just a few days.
What’s the difference between federal and private student loans?
Though both can be used to fund your education (often in conjunction with one another), federal and private student loans have some very important differences.
Federal student loans
- The federal government pays the interest on Direct Subsidized Loans while you’re in school and for the first six months after you leave school.
- Offer loan forgiveness to students who meet certain criteria
- Don’t usually require a cosigner
- Require completion of the FAFSA
- Provide the option to defer payments, if needed, or adjust your repayment plan
- May have higher interest rates
Private student loans
- Involve a credit check
- May require a cosigner (adding one can increase your chances of approval)
- Don’t offer loan forgiveness or subsidized loan options
- Don’t usually offer income-based repayment options or loan deferment (some private lenders offer deferment; be sure to find out before accepting the loan)
Depending on your career plans, ability to repay after college and factors like your credit history, one type of student loan may make more sense for you than the other.
How do I check my loan status?
So, you’ve calculated your educational costs, applied for your student loan and sent in all the required paperwork. Now what?
How do I check my federal student loan status?
If you’re curious about whether or not your approved federal student loans have been disbursed, you can always go online to check the status.
You’ll first want to log in to your FAFSA account at fafsa.ed.gov. From there, you can view your upcoming approved loan(s) and the loan servicer assigned to them. If you want to know whether the funds have been sent, you can simply check with the loan servicer to discuss the disbursement status.
How do I check my private student loan status?
If your student loans are through a private lender, you’ll simply need to contact the lender directly to get information on the disbursement.
In some cases, you’ll already have a login, which you can use to access the lender’s loan management portal online. There, you may be able to see if and when the funds have been sent out, or when they’re expected.
If you don’t have portal access, you can usually just call the lender or, in some cases, chat with them online to inquire.
If you’re trying to find the best rates on private student loans, Credible can help. Compare rates from various lenders all at once.
How to get federal student loans
When considering federal student loan funding to pay for your education, there are a few different options to choose from.
Depending on your personal financial aid offer, you may be offered a:
- Direct Subsidized Loan: The U.S. Department of Education will cover (or subsidize) the interest on this need-based loan, designed for undergraduate students, while you’re in school half-time or more, as well as the first six months after you graduate and if you’re ever in a period of deferment. But you must demonstrate financial need to qualify for this loan.
- Direct Unsubsidized Loan: This loan is not need-based and is offered to both undergraduates and graduate students. Borrowers are responsible for all interest incurred on unsubsidized loans.
- Direct PLUS Loan: This loan is taken out by eligible undergraduate students and their parents, or by graduate or professional students. Parents will need to apply for this loan for their undergraduate student, and credit history will be taken into account.
Your school determines the federal student loan maximum you’re allowed to take out. Generally, this can’t exceed your actual educational expenses, minus any financial aid, and may or may not be need-based.
Here are the steps to get a federal student loan.
1. Complete the FAFSA
The first step to borrowing a federal student loan is to complete the FAFSA. This form will determine your need for financial aid, and whether or not you’re eligible to take out federal loans.
2. Review your offer
Once your school has confirmed attendance and costs and reviewed the information from your completed FAFSA, you’ll be sent an award letter. This offer includes your federal aid (such as grants), any scholarships and the federal loans you’re eligible for.
3. Complete entrance counseling
To ensure that you understand your debt obligations and the terms of your federal loan, you’ll be required to complete entrance counseling. This takes about 30 minutes to complete, and your school will be notified once you’re finished.
4. Sign Master Promissory Note
You’re almost there! The last step to receiving your federal student loan is to sign your Master Promissory Note. This is your agreement to the loan terms offered to you, as well as your promise to repay the debt (plus any applicable interest and fees) on time, as scheduled and according to those terms.
How to get private student loans
Taking out a private student loan is a bit different but can be simpler and quicker in many cases.
Private loans can be taken out by the student or cosigned by a parent. Having a cosigner with good credit usually means you’ll have a better chance of approval, as well as better loan terms.
Your maximum private student loan amount depends on your credit history and your actual educational expenses. These may include tuition, room and board and books.
Here are the general steps for getting private student loans.
1. Research your options
Before taking out a private student loan, you’ll want to see which options are out there for you. Compare the differences between various private loans, and the benefits they each provide. Remember that it’s best to exhaust your federal student loan options before turning to private student loans.
2. Decide if you need a cosigner
Private student loans are credit-based; this means that if you have little or no credit history, you’ll need a cosigner to qualify (usually a parent). Speak with your cosigner to ensure that everyone understands the terms of the loan and the obligation each party is taking on.
3. Gather paperwork
Be sure to gather any necessary information and paperwork before you apply. This may include your tuition and expenses, Social Security numbers for all applicants, income statements, W-2s and tax returns.
4. Submit application
Now it’s time to apply! You’ll be asked for certain personal information, and will also need to provide the lender(s) with your requested loan amount. They will want to know which school you’re attending, as well as the semester for which those funds are earmarked.
5. Accept loan terms
Once you’ve found the right loan for you — including the interest rate and repayment options that suit you best — it’s time to accept the loan. You’ll need to sign an agreement (or promissory note) for the debt before funds are released, promising to repay your loan and interest.
6. Wait for school certification
The lender will contact your school for verification to ensure that you are indeed enrolled and that your declared expenses match up. Once the school certifies this information, funds can be cleared for disbursement.
What to keep in mind when taking out student loans
Student loans are a necessary part of life for many students but that doesn’t make them any less daunting. Here are a few things to keep in mind along the way to make the application process — and your eventual repayment — as pleasant as possible.
Shop around before deciding on a private student loan lender. Whether you’re buying a car, a house or even a washing machine, you probably shop around for the best options first. Taking out a private student loan is no different.
By shopping around with multiple lenders, you can find the loan terms that suit you best, including the lowest possible interest rates.
Credible makes this process simple, allowing you to compare rates from multiple lenders at once.
Be sure you know what expenses your loan will cover. Many student loans have limitations. If you want your loan to cover things like books, lab fees and living expenses, you may need to choose a certain loan type or even combine a mixture of loans.
Only borrow what you need to avoid paying more interest. It can be tempting to tack on extra funds to your loan but try to only borrow what you truly need. Anything you borrow will add to the total interest of your loan and possibly keep you in debt longer.
Look at your repayment options. Most federal loans allow you to wait until six months after graduation to start repaying your debt. Private loans may or may not have forbearance/deferment options so be sure to check the terms before selecting a private loan.
Whether you take out federal or private student loans (or a combination of both), it’s important to stay on top of deadlines. Keep track of each step in the process so that you know exactly when to expect your student loan funds.