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How to Get a Student Loan

The federal government and private lenders both offer student loans. Rates will differ by lender, but your best bet is to start with federal loans.
March 1, 2018
Loans, Student Loans
How to Get a Student Loan
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Most students — seven in 10 — borrow money to pay for college. Here are the steps you can take to get a student loan.  

When should you use a private student loan? If you’ve borrowed the maximum in federal loans, or if your credit is so strong that you qualify for a lower interest rate than federal loans.
How do you qualify for a student loan? Attend an eligible school and be a citizen or permanent resident. Your credit doesn’t matter for federal loans. It does for private.
Where can I go to get a student loan? Submit a FAFSA to access federal loans as well as other aid. Banks, credit unions and online lenders all offer private student loans.
How can I get a student loan without a co-signer? Use a federal loan. A few private lenders gear loans toward independent students, but you’ll pay more.
Can you take out a student loan for living expenses? Not directly, but after your school takes out tuition, fees, room and board, any remaining loan balance may be returned to you for books, supplies, transportation or other related living expenses.

Step 1: Submit the FAFSA

Submit a Free Application for Federal Student Aid, or FAFSA, to find out how much financial aid you may qualify for, such as grants, scholarships and work-study, that won’t have to be repaid. It takes about 30 minutes to complete. Each school you apply to will use the FAFSA to determine your financial aid; the gap between aid and cost of attendance is what you have to cover.

Step 2. Use federal loans first

The FAFSA serves as your application for federal student loans as well. You’ll be notified of what you can borrow in the financial aid award letter from any school that accepts you. Federal loans don’t require a credit history or a co-signer, and they offer more generous protections for borrowers than private student loans do, such as income-driven repayment and loan forgiveness. There are two types of federal loans: subsidized and unsubsidized.

Step 3. Take subsidized loans before unsubsidized

Subsidized federal loans go to undergraduate students with a financial need. The subsidy covers the interest on the loan while you’re in school. Unsubsidized federal loans aren’t based on need, and interest starts to accrue immediately.

» MORE: How much can you get in student loans?

Step 4. Use private loans to fill gaps cautiously

Consider private student loans to cover any remaining costs. Banks, credit unions and online lenders all offer student loans. Most private lenders don’t technically require a co-signer, but you’ll have difficulty getting a private loan without one. Weigh repayment flexibility and forbearance options as well as the interest rate.

» MORE: 7 ways to get the lowest student loan interest rate

Step 5. Look ahead before you borrow

Think ahead to how you’ll repay debt. Put a dollar figure on it by using a student loan payment calculator. This is the bill you’ll be paying every month for 10 years or longer. Borrow only what you need, and don’t take on an amount or an interest rate you can’t expect to handle right after graduation.

Parents looking for loans to pay for their child’s education have federal and private loan options available. Each option will require a credit check. There are three primary options to consider:

• Direct PLUS loans: Direct PLUS loans are the only federal student loan that parents can take. You’ll need to submit a FAFSA with your child and complete a parent direct PLUS loan application in order to borrow.
• Co-signed private student loan: Co-signing a loan with your child will make you equal borrowers. It’s best if you have good credit, a steady income and are willing to take on the responsibility of paying the debt if your child can’t.
• Private college loans for parents: Certain private lenders may offer private college loans for parents to borrow rather than co-signing on a student loan. The debt is your sole responsibility.

» MORE: The best student loans for parents

Graduate students loans include two federal loan options, along with private loans.

Federal direct unsubsidized loans. Graduate students can borrow up to $20,500 each year. To apply, submit the FAFSA. There is no credit check involved.
Federal direct PLUS loans. Graduate students can borrow up to the cost of attendance minus any other financial aid. Your credit is considered. To apply, submit the FAFSA and complete a graduate student direct PLUS loan application.
Private student loans. Apply directly with a bank, credit union or online lender. Your credit history affects the interest rate and repayment terms. Some private lenders may have specific loans for graduate students depending on field of study. You typically can borrow up to the cost of attendance minus any other financial aid.

» MORE: 3 graduate student loans and when to borrow them

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