How to apply for student loans — federal and private

The student loan application process varies by loan type.  (iStock)

Many college students finance their educations through federal student loans or private student loans. If you need help paying for college, you’ll need to learn how to apply for student loans.

Though the process isn’t complicated, it does vary based on which type of loan you’re seeking. In many cases, you may end up applying for both types of student loans.

When deciding between federal loans and private loans, you'll want to compare interest rates — as there are distinctions in how these loans charge interest.

Generally, you'll want to start with federal loans, which typically come with lower interest rates and more favorable repayment options. When you've exhausted that resource, you can always turn to private student loans to fill in the gaps. There are several reasons to choose private student loans, which can help finance additional college expenses. 

Here's a step-by-step guide on how to apply for student loans.

How to apply for federal student loans

To apply for any federal loans, you’ll need to fill out the Free Application for Federal Student Aid, or FAFSA. Here’s what the loan application process looks like:

  • Step 1: Gather your financial info
  • Step 2: Go to
  • Step 3: Wait up to 10 days
  • Step 4: Look out for financial aid award letters

Step 1: Gather your financial info

You’ll need your (or your parents’) tax returns for the last two years, your household’s adjusted gross income, information about your household assets and the Social Security numbers for you and your parents. You will also need a list of schools you plan to apply to when filling out the FAFSA application.

Step 2: Go to

Create an account on FAFSA's website, and fill out the online application. You’ll need all the info you gathered in Step 1 to complete the form.


A nice bonus with FAFSA is that it also functions as an application for federal grants — which are funds you don’t have to pay back (or pay interest on). Some commonly used federal grants include Pell Grants and TEACH Grants.

Step 3: Wait up to 10 days

Once your application has been processed, you’ll receive a Student Aid Report detailing all your financial stats — including the amount your family is expected to contribute toward your education. Unless you find any errors in this report, it will be sent to the schools you’re applying to for evaluation.

Step 4: Look out for financial aid award letters 

Financial aid award letters can make a difference when you're deciding which school to attend. Awards will vary by university. If you choose to accept an award, there’s usually a form you mail back or an online portal you’ll need to log into to move forward with the offer.


A note on federal student loans

Federal loans, like Stafford Loans, Perkins Loans or Direct PLUS Loans, are typically your best option for covering college costs.

These come with flexible interest options (some don’t acquire interest the entire time you’re in school), and they offer lots of perks like grace periods, deferment if you’re unemployed, income-based loan payment plans, and even total loan forgiveness if you go into public service after graduation. There are even Parent Loans if your mom or dad wants to help shoulder some financial burden.

How to apply for private student loans

If you’ve maxed out your federal loan options or you just need additional funding, you can then consider private student loans, which you’d get from a bank or lender.

Here’s what the general process looks like for private student loans:

  • Step 1: Find several student loan lenders
  • Step 2: Compare rates from multiple lenders
  • Step 3: Gather your financial details
  • Step 4: Fill out the lender’s online application
  • Step 5: Agree to a credit check
  • Step 6: Await your results

Step 1: Find several student loan lenders

Many banks, credit unions, and even online lenders offer private student loans. You can also check with your personal bank or credit union, too. Here are some of the best private student loan vendors in 2020 that will, hopefully, meet your financial goals, according to Credible’s resident experts.

Step 2: Compare rates from multiple lenders

Get rate quotes from at least a handful of lenders. Since interest rates vary widely by lender, this can help ensure you get the best deal on your loan. To streamline the process, consider a tool like Credible, which lets you compare rates from several private lenders at once.

Step 3: Gather your financial details

You’ll need to know your annual household income and have any recent tax returns, bank statements and info about your assets on hand.

Step 4: Fill out the lender’s online application

Fill out your chosen lender’s application (if one is available) or get in touch with a loan officer to get started. You will also need to fill out a Private Education Loan Application Self-Certification form and submit it to your lender.

Step 5: Agree to a credit check

If your parents or someone else is co-signing your loan, they will need to submit to a credit check as well. If you’re an undergraduate or just have sparse credit, you can generally expect to need a co-signer for any private student loan. Just make sure you choose someone who’s financially responsible and has good credit.


Step 6: Await your results

Once the lender evaluates your credit and application, they’ll determine how much you’re eligible to borrow and at what terms. You can then accept or deny the offer. If you accept, the loan proceeds will go to your school, which will put them towards your account.

A note on private student loans

Private loans are credit-based, which has its pros and cons. On the good side, there’s a chance you might get a better interest rate than you would on a federal loan. The downside? You (or mom and dad) will need to have a stellar credit history to secure it. Usually, private loans don’t come with the same perks as federal loans, either (like income-based repayment plans, interest grace periods and more).

When you should apply for a student loan

The timing of your application will also depend on what type of loan you’re applying for. With federal student loans, there are hard deadlines you’ll need to meet if you want funding in time for the upcoming school year. If you’re seeking for private student loans, you can apply at any time, though you’ll probably want to do it early enough to cover any school-related expenses that may come up.

Federal student loans

If you want your federal student loan funds by the fall semester, you’ll need your FAFSA filed by the end of the day June 30 (Central Time). Individual colleges and states may have different deadlines, though, so call your school’s financial aid office and check this list of state deadlines well ahead of time.

Private student loans

You should apply for student loans at least a few months ahead of any school-related costs you need help with. To be extra safe, contact your school and find out when your first tuition and housing payments will be due. Then, apply for your loan well ahead of that. Depending on your lender, it could take a few weeks to get through the application process and receive your funds.

Remember, make sure you use an online student loan calculator before applying for a private loan, and make sure you don’t take out more than you need. You should also use a tool like Credible to compare interest rates without affecting your credit score.


Know how much you need before applying

Any time you take out debt, you should proceed slowly and only take out what you need. Always start with lower-cost federal loans first — ideally direct subsidized ones, which won’t accrue interest while you’re still in school (unsubsidized ones will). Once you’ve exhausted those, move on to private student loans.

Just be sure to use a site like Credible before choosing your lender. Rates and terms vary from place to place, so just a few extra quotes from lenders could save you significantly in the long run.