For students planning to attend college, securing financial assistance is a crucial step. One of the most common options is a student loan, which helps cover tuition, living costs, and other expenses. But, how long does it take to get a student loan?
Getting to Know Student Loans
Before looking at how long it takes to get a student loan, you need to know first the basics. Student loans are a sort of financial aid that helps students cover college or university costs such as tuition, fees, and housing. In the United States, more than 43 million people have student loan debt. There are two types of student loans: federal and private.
Federal student loans, include Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans. These are typically the best option for students due to lower interest rates and more flexible repayment choices.
Private student loans are available through banks, credit unions, and online lenders. They tend to have higher interest rates and are usually used after a student has borrowed as much as they can from federal loans.
How long does it take to get a student loan?
The time it takes to receive a student loan varies depending on whether it’s a federal or private loan. Below are the typical timelines for both types.
Federal Student Loans
Federal student loans follow a set process, and their timelines are generally consistent. Here’s what you can expect:
Step 1: Fill Out the FAFSA
The first step in getting a federal student loan is completing the Free Application for Federal Student Aid (FAFSA). This form assists in determining whether you are eligible for federal financial aid such as loans, grants, and work-study programs. The FAFSA normally opens on October 1 for the next academic year and finishes on June 30.
Step 2: Wait for Processing
After you submit the FAFSA, it takes about 3 to 5 days for the Department of Education to process it. Once processed, you will receive a Student Aid Report (SAR) indicating what financial aid you may be qualified for.
Step 3: Review Financial Aid Offers
Your school’s financial aid office will look at your SAR to figure out what loans and other aid you qualify for. You should get a financial aid offer within 3 weeks of submitting your FAFSA, though this may vary by school.
Step 4: Complete Loan Counseling and Sign the Loan Agreement
If you choose to accept a federal loan, you’ll need to go through entrance counseling, which explains how loans work. You will also sign a Master Promissory Note (MPN), which is a legal agreement outlining the terms of your loan.
Step 5: Receive Your Loan Money
Once everything is set, your school will send the loan money directly to your account to cover tuition, fees, and other expenses. Federal loans are usually given out at the start of each term. If there’s extra money after your school costs are covered, you’ll get a refund in a few weeks.
For federal loans, the processing time after you submit the FAFSA for approval usually takes about 2 to 4 weeks. The funds are then disbursed according to your school’s schedule, which generally happens at the start of the semester.
Private Student Loans
Private student loans are provided by banks, credit unions, or other lenders, and their timelines might be more flexible than federal loans. Here’s a general outline:
Step 1: Research Lenders
Unlike federal student loans, private student loans do not require a single application form. Each lender sets its restrictions, interest rates, and repayment terms. It’s critical to compare multiple lenders to choose the one that best meets your demands.
Step 2: Apply
After choosing a lender, you’ll need to fill out an application. Most lenders will ask for your personal information, including your name, date of birth, Social Security number, contact info, school name, estimated cost of attendance, graduation date, the loan amount you need, and household income.
Step 3: Wait for Approval
Once you’ve submitted your application, the lender will review it. This process might take anywhere from a few hours to many weeks, depending on the lender and your unique circumstances.
Step 4: Complete Loan Documents
If your loan is approved, you’ll need to sign the necessary documents, like a promissory note, and possibly provide extra paperwork before the loan can be finalized.
Step 5: Receive Loan Disbursement
After all the paperwork is complete, the lender will send the loan funds either to your school or directly to you, depending on their policy. This process may take an additional one to two weeks.
If you’re applying for a private loan, how quickly you can get a student loan depends on the lender. Some lenders issue loans quickly, while others can take up to two weeks. The timeline from application to disbursement for private loans typically takes 2 to 4 weeks.
Factors That Influence How Long It Takes to Get a Student Loan
Several factors can impact how long it takes for a student loan to be approved. These include:
- Type of Loan: Federal loans tend to follow a more predictable timeline, while private loans may vary significantly based on the lender’s process.
- Application Timing: Applying early is essential for speeding up the process. Completing the FAFSA or private loan application as soon as possible gives you more time to handle any issues or delays.
- School Processing Time: Once your loan is approved, the school’s financial aid office needs time to process the funds and apply them to your account.
- Verification: If your FAFSA is selected for verification (which is common), this can add an extra 2 to 3 weeks to the process, as the financial aid office will need to confirm your information.
- Co-Signer: If you apply for a private loan with a co-signer, this can sometimes speed up the approval process, especially if the co-signer has a strong credit score.
Tips to Quickly Get Your Student Loan
If you want to get your student loan quickly, here are some steps you can take to speed things up:
- Submit the FAFSA early: The FAFSA opens on October 1 each year. It’s a good idea to complete it as soon as possible because some assistance is provided on a first-come, first-served basis.
- Have your documents ready: Gather everything you need before starting your application, such as tax returns, W-2 forms, and school details. This makes filling out the forms faster and more accurate.
- Pre-qualify for private loans: Some private lenders let you check if you qualify and see estimated rates without affecting your credit score. This can help you identify the finest loan options quickly.
- Respond quickly to requests: If your lender asks for more documents or information, send them right away to avoid any delays.
- Look into other funding options: If you’re short on time, consider alternatives like scholarships, grants, or work-study programs. These can help you lower the amount you must borrow in student loans.
It takes weeks to months to get a student loan.
Getting a student loan can take anywhere from a few weeks to a couple of months, depending on whether you’re applying for a federal or private loan. Federal loans typically have a more predictable process, while private loans differ per provider. To speed up the process, submit your FAFSA or loan application early, have all your documents ready, and respond quickly to any lender requests. Scholarships and grants can also help minimize the amount you need to borrow. Planning and staying organized is key to securing your student loan smoothly and on time.