Short answer: it takes around 1 to 3 weeks to get a federal student loan, and 2 to 10 weeks to get a private student loan.
It takes that long because it takes time to process a loan application. Lenders must do many behind-the-scene checks before disbursing funds to loan applicants.
The federal government has a different loan process from that of private lenders, hence the different time-lines. The processing time also varies depending on where the funds are sent. Some funds are sent directly to the student’s account, while others are transferred to the school.
So how long does it take to get a student loan? Understanding the student loan process will help you get a clear idea of how long it could take for you to get the funds.
The Federal Student Loan Process
Federal student loans are funded by the federal government. To get federal student loans, you must first file the Free Application For Federal Student Aid or FAFSA. Filing the FAFSA is the only way to get access to several different types of financial aid. This includes federal student loans, merit-based scholarships, grants, work-study, and institutional aid.
Is it easy to get federal student loans?
Yes, it is relatively easy to get federal student loans. After you fill and submit your FAFSA, the federal government will calculate your eligibility for aid. This is based on the financial information provided on your application. Every student is eligible for a different amount of financial aid depending on their financial circumstances. We strongly recommend you file the FAFSA, regardless of whether or not you think you qualify for any money.
One thing to keep in mind is that the FAFSA is only valid for one academic year. You must fill this application every academic year before the submission deadline in order to receive financial aid during subsequent years. Also, your eligibility may change every year depending on changes in your family’s finances. This means the federal financial aid that you receive will be different every year.
How long does it take to get a federal student loan?
It takes about 1 – 3 weeks to process the FAFSA and put together a financial aid package that is customized for your needs. You will receive a detailed breakdown of your financial aid package. If you agree with the amount and terms of the loan, you will need to sign a Master Promissory Note. Signing this note means you are agreeing to the terms of the loan, specifically with regard to the repayment. Federal student loans are disbursed only after you sign this Master Promissory Note. To receive the funds on time, make sure you sign the note and send it as soon as possible.
In most cases, you can expect federal student loan funds to be disbursed within 10 days before the 1st day that classes commence. If you’re a first-year student and a first-time borrower, there may be a 30-day delay in allocating the funds. In this case, the funds may be disbursed 30 days after the 1st day of the payment period.
The Private Student Loan Process
The private student loan process is very different from the federal student loan process. These loans are funded by private lenders. Each lender sets their own eligibility requirements, terms and conditions, interest rates, and repayment schedule. These criteria can vary significantly among lenders. When taking private student loans, it pays to do your research to get the best deal.
Is it easy to get private student loans?
It’s relatively more difficult to get private student loans than it is to get federal student loans. Private lenders usually approve loan applications based on the applicant’s credit score. A high score means you’re a responsible borrower and will get you approved easily.
As a student however, you wouldn’t have had any opportunity to build your credit history. This will make it difficult for you to get approved for a private student loan. One way to get around this obstacle is by applying with a creditworthy cosigner. This could be a family member or friend who meets the lender’s credit requirements.
Finding someone who agrees to cosign your loan is not easy. When a person cosigns your loan, they are sharing the responsibility of the loan with you. This can put them at risk of damaging their credit if you default on your loan repayments.
How long does it take to get a private student loan?
It can take anywhere from 2 – 10 weeks for you or your college to receive the funds from the date that your loan application is approved. If you’re taking a school-certified loan, the funds are disbursed directly to the school you are enrolled in. If you are taking a direct-to-consumer loan (or uncertified), the funds will be disbursed directly into your personal bank account.
Keep in mind that private student loans should be your last resort. These loans come with higher interest rates and more rigid repayment terms. As a rule, you must file the FAFSA, apply for scholarships and exhaust your federal financial aid options before taking private student loans.
Other Things to Keep in Mind About Loans
Many students, despite the number of scholarships and grants they receive, still need to take out student loans. If your college isn’t offering you enough federal student loans, here are some things to keep in mind with private loans:
- Don’t feel pressured to commit to a private lender. Shop around, and decide which loan and interest rates are best for you. Remember, the loan can heavily impact your financial situation after graduation.
- If you take out a direct-to-consumer, or uncertified, loan, make sure you research what you should be spending your money on. Just because the money goes straight to you, doesn’t mean you can spend it on anything you want. Only spend the money on education-related necessities, such as textbooks.
- Only take out as much as you need and not any more. You have to repay the money with accrued interest, which adds up to a huge amount over the years.
Use College Raptor’s free Student Loan Finder to compare lenders and interest rates side by side!