If yą“ouāre pursuing a college or graduate degree, one of the crucial steps in your journey may be securing š§a student loan.
While you ļ·½wonāt need to do much after submitting your application, it can take several months to receive a fedš°eral student loan. Private student loans are typically faster, but will still take several weeks to finalize.
Hereās what to expect, when you should apply, and how you can speed up ąµ©the process.
- Timing for federal student loans
- Timing for private loans
- 4 factors that can affect your loan’s timeline
- Tips to speed up the process
How long does it take to get a federal student loan?
Federal student loans have a lot of benefits, š”but speed isnāt one of them ā the application and disbursement process can take several months.
To be eligible for a federal šloan, you must sšubmit the Free Application for Federal Student Aid (FAFSA). Exactly how long it takes to receive the money depends on when you fill out the FAFSA and your schoolās financial aid policies.
The newest version of the FAFSA is available annually on October 1 for the following school year. While the federal deadline gives you more than 18 months to submit it, many states and colleges set earlier deadlines. In addition, some financial aid is awarded on a first-come, fiį¦rst-serve basis, so itās wise to complete the FAFSA as close to the October 1 opening date as possible.
However, schools generally donāt determine financial aid awards (including federal loans) uš¼ntil the spring, so it may be several months until you learn what loans you qualify for and how much you can borrow.
Getting the funds into your bank account can take even longer. Near the start of each term, your school will first apply your loan money to your tuition and fees. Any amount thatās left over will be distributed to you to use for other education expenses. Your financial aid office can give you a more precise disbursement schedule, as each school has a different špolicy.
If youāre a first-time borrower, it may take up to 30 days after the start of the term before yš²our school sends you any leftover loan money.
| Tip: If you have leftover student loan funds that you donāt need, returning them to your lender or loan servicer would be wise. This way, youāll lower your outstanding balance, decreasing the cost of your repayment. |
How long does it take to get a private student loan?
The timeline for securing a private student loan š»is typically much faster, but it varies depending on the lender and your school.
Generally, it š§takes about four to six weeks to finalize a privatāe loan, so start the process a few months before your tuition is due. This will give lenders ample time to review your application and make a decision on the loan.
You can often prequalify for a loan instantly on a lenderās website ā just submit a few pieces of informationš to see the interest rates and terms you might qualify for. If you decide to move forward, youāll submit a formal application, which can be approved within minutes or days.
ā¦Youāll need to sign some final paperwork to complete the process. Then, the lender will work with your school to certify your cost of attendance and enrollment details, whicāh can take another seven to 10 days.
Most private lenders will send the money directly to your school, which will apply it to your tuition and fees before disbursing any extra cash to you. This typicallyā happens at the start of the next academic term, but check with your lender and your schoolās financial aid office to confirm the details.Ā
4 factors that can affect your loan’s timeline
Several factors can affect the timeline of getting a student loan. Hereās what to plan for as you decide when to apply for your student loans.
1. Time of year
Processing times for student loans can vary based on when you apply. January and August are often busy times ā schools must certify loans fš¼or all of their students by the start of the academic term, so delays can occur.
2. Completeness of your application
Whether youāre applying for federal or private student loans, youāll be asked to provide financial information and documentation. Be sure ź§to include the necessary paperwork and revź§iew your application for errors. Taking a few extra minutes to double-check your work can save you from delays later on.
3. Failure to respond promptly
After you submit an application for a student loan, your work isnāt done yet. The lender may have follow-up questions based on the information you provided, and youāll need to sign a promissory note before the lender can disburse any š¹funds.
To keep the process moving smoothly, make sure the lender has your correct contact š¦information and yošu respond quickly to any requests.
4. Using a cosigner
Sometimes, you may not be approved for a loan on your own. If the lender requires you to get a cosigner, that will add extra time to the process. Youāll need to find someone whoās willing to share responsibility for your debtš, and theyāll need to add their own details and paperwork to the application before you can submit it.
Tips to speed up the process
If you want to expedite the student loan process, there are a few things you can ą¦do
to speed things along.
- Gather necessary documentation. Before you start the application process, gather the required paperwork so you can complete your application quickly. While the requirements vary, you typically need your Social Security number, employment information, copies of bank statements or other financial accounts, and information on your cosigner (if you have one). Having this information ready will help ensure your application isn’t delayed due to incomplete paperwork.
- Consider prequalifying. When you get prequalified for a private student loan, you can view estimated rates from a lender without impacting your credit score. This can help you narrow down your options and find a loan that fits your needs without going through multiple lengthy applications.
- Stay in contact with your cosigner. If youāre applying for a private loan with a cosigner, make sure theyāre aware of the timeline and complete their part quickly. This will help to ensure that the money is released in a timely manner.
Getting a student loan can take some time, but starting the process early and staying organized can help. Be sure to respond to any lender questions or requests quickly, and youāll š²have a better chance oą½§f getting your loan approved and funded on time.