How to Get a Student Loan

Point of Interest

Student loans can help you cover educational expenses that your savings, scholarships, and grants don’t, but before choosing a lender, shop around to get the best possible student loan rates and repayment terms available.

Student loans are used by many students and their families to pay for college costs that savings, grants and scholarships don’t cover. In fact, 43% of people who attend college incur at least some debt, and student loans are the most common form — 93% of those with outstanding education debt have student loans.  So if you need financing for college, you’re definitely not alone.

The student loan application process can feel confusing and overwhelming, especially if you’ve never been through it before. But don’t worry — millions of students have navigated the process successfully and secured the financing they needed to attend their dream schools.

LenderVariable APRFixed APRMin. Loan AmountDeferment Period
Sallie Mae Smart Option Student Loan2.75%-10.65%4.74%-11.85%$1,000Up to 6 months after graduation and 60 months for internships
Discover Undergraduate Student Loan2.80%-11.37%4.74%-12.49%$1,000Up to 6 months after graduation and 5 years for military service
Earnest Undergraduate Private Student LoanStarts at 2.74%Starts at 4.39%$5,000Up to 9 months after graduation
College Ave Undergraduate Student Loan2.84%-10.97%4.54%-11.98%$1,000Up to 6 months after graduation

The 4 best private student loans

Sallie Mae Smart Option Student Loan

Sallie Mae offers a loan for undergraduate students with flexible repayment options and competitive interest rates. You can defer payments until six months after graduation or make small payments while you’re in school to lower your total loan cost.

If you start paying back the loan right away, you’ll get a lower interest rate. You can also set up automatic payments to receive a 0.25% reduction in your APR. Even if you don’t take advantage of these offers, you’ll still receive a low variable APR of 2.75% to 10.65% or a fixed APR of 4.74% to 11.85%.

Discover Undergraduate Student Loan

Discover’s Undergraduate Student Loan lacks many of the common fees you find with other student loans. You won’t have to pay any application or origination fees and if you’re late on a payment, you won’t even have to pay a late fee. Additionally, Discover offers cash rewards for good grades. If you get a GPA of 3.0 or higher, you’ll get a cash reward that’s equal to 1% of the total loan amount.

This loan also has low interest rates. Depending on creditworthiness, borrowers can get a variable APR between 2.80% and 11.37%, or a fixed APR between 4.74% and 12.49%.

Earnest Undergraduate Private Student Loan

Earnest’s Undergraduate Private Student Loan has a long grace period, flexible repayment options and no fees. While most lenders only give you six months to start paying your loan after graduation, Earnest gives borrowers nine. The company also allows you to skip one payment each year without any fees or consequences.

Earnest also offers several flexible repayment options to suit your financial situation. You can pay $25 per month, make small, interest-only payments or start paying the full amount right away to reduce your total loan cost substantially.

Another advantage of going with Earnest is that you won’t pay any fees for origination or disbursement of the loan. Further, you won’t get hit with extra charges for prepaying your loan or paying late.

College Ave Undergraduate Student Loan

College Ave lets you choose your loan term so you end up with a monthly payment you can afford. The lender offers both short and long terms ranging from five to 15 years. So whether you want to pay off your loan quickly to save on interest or slowly to reduce your monthly payment, you have options.

College Ave also gives you the choice between variable interest rates that will fluctuate over time and fixed interest rates that will stay the same. It offers a low variable APR of 2.84% to 10.97% and a fixed APR of 4.54% to 11.98%.

What is a student loan?

Student loans are designed to help students and their families pay for college and graduate school. They cover education-related expenses like tuition, housing, books, computers and more.

There are two main types of student loans — federal and private. Federal student loans have lower interest rates and more flexible repayment plans than private loans, so you should apply for them first. You usually don’t need a cosigner or a credit check to qualify for federal loans.

If you don’t receive enough federal aid to cover all of your educational expenses, then you should apply for a private student loan.

How to get a student loan

Applying for a loan can be overwhelming, especially if you’ve never done it before. To make things a little easier, here’s a step-by-step guide on how to get a student loan.

Step 1: Fill out the FAFSA

To apply for federal student loans, all you have to do is fill out and submit a FAFSA form. You can do this by going to the Federal Student Aid website. It usually takes around two weeks to hear back about your application and find out which loans you qualify for.

If you don’t end up receiving as much aid as you expected, don’t panic — you can apply for private student loans to cover the rest of your education costs.

Step 2: Start early and shop around

If you need a private student loan, you’ll have to shop around to find the best interest rates and payment terms. Every lender will give you a different offer, so make sure you get multiple quotes.

Applying for private loans takes more time than securing federal aid, so you should start researching your options at least two months before your tuition is due. That way you won’t be scrambling to get a loan at the last minute.

Step 3: Find a cosigner

Most college students need a cosigner to qualify for private student loans because they have limited credit history and income. In many cases, the cosigner is one of the student’s parents.

Step 4: Figure out how much you need to borrow

On your application, you’ll have to indicate how much money you want to borrow. If you’re not sure how much you need, take a look at the financial aid award letter you got from your school. It should tell you what your total cost of attendance is after grants, scholarships, and federal aid.

Step 5: Gather important documents and fill out the application

To complete your application, you and your cosigner will need to have some personal and financial information on hand, including your Social Security numbers, copies of your latest tax returns and recent pay stubs. You may also need someone who knows you, like a family member or close friend, to serve as a personal reference.

Once you’ve gathered the information you need, you can complete your application. Set aside a few hours to fill it out and take your time so you don’t make mistakes.

Jessica Walrack

Personal Finance Contributor

Jessica Walrack is a personal finance writer at SuperMoney, Interest.com, The Simple Dollar, and PersonalLoans.org. She specializes in taking personal finance topics like loans, credit cards, and budgeting, and making them accessible and somewhat fun.