How Long Does It Take to Get a Student Loan

So, you’ve made the choice to go to school, get an education, and forge a career path for yourself.  Congratulations!  But, this also probably means you’ll need to apply for a student loan or two.  And, like any first-time applicant, one of your most common questions is how long does it take to get a student loan? 

To be brief, on average, it takes about 1-3 weeks to be approved for a federal student loan.  Or 2-10 weeks for a private student loan.  But, to be honest, the processing timeline is not the only difference between these two borrowing options.

And so today, we’re going to break down these two different types of student loans.  That way you can get the answers to all your questions and make a well informed borrowing decision.  

We’ll cover questions like, what’s the difference between a federal student loan and private student loan? When do I have to pay them off? And how long does it take to get a student loan?

Let’s get started!

What’s the difference between federal student loans and private student loans?

For starters, you can think of a federal student loan like a public service that’s available to everyone.  That’s because they’re distributed by the government, specifically the U.S. Department of Education. 

Whereas a private student loan is granted by an independent company like a bank.  Because of this, getting a private student loan can be a more complicated process with more exclusive rules and parameters.

While there are pros and cons to each, the most important thing to compare is the interest rate or APR.  For a federal student loan, the interest rate tends to be much lower than that of a private student loan.  This is great because it means you’ll likely pay less money in the long run.

However, oftentimes, students can struggle to have their entire education funded by federal student loans.  And this is where private student loans usually come into play.

How long does it take to get a student loan? (in-depth)

Most likely, the reason you clicked on this article is that you really need to know: How long does it take to get a student loan?  Perhaps you’re under time pressure, or maybe you’re just curious to know for the future.  Either way, the processing timeline differs depending on if you’re applying for a federal or private student loan.  

Federal Student Loans: The process of applying for a Federal Student Loan is quite straightforward.  It all starts with the Free Application for Federal Student Aid or FAFSA.  Simply go to www.FAFSA.gov, make an account, and answer the question prompts. 

Once the application is complete (which will likely take 90 minutes or less) it takes about 3-5 days to process.  In some rare cases, it can take as long as three weeks.  

After this processing period, your school(s) should inform you how the money you’ve been awarded in 1-3 weeks.  Meaning you’ll wait approximately one month after completing the application to find out how much you’ve been awarded.

Private Student Loans: Unlike a federal student loan, a private student loan might be approved in minutes.  Or, if your application requires further review, it can be a couple of weeks until you receive approval.  

While that timeline does not differ too much from the federal student loan process, this next part does.  Oftentimes private student loans have to be certified by your school before funds can be dispersed.  That means you should set aside another two weeks to ensure your school accepts this private student loan. 

This makes your overall processing timeline for private student loans anywhere from 2-4 weeks, if not more.

How long does it take for student loan funds to be dispersed?

In this section, we will talk about how long it takes for those approved funds to get dispersed.  Or, in other words, how long you/your school can expect to wait to actually receive the money.

Federal Student Loans:  Perhaps one of the biggest benefits of federal student loans is that they are automatically dispersed directly into your school’s account balance within the first 10 days of class.  Sometimes, for first time federal student loan borrowers, there is a 30 day delay, but this is quite normal.  

Therefore, keep in mind that federal student loans do often bring school financial aid counselors peace of mind.  This is because they are quite accustomed to the FAFSA application and handling these types of loans.  Therefore hiccups and delays are less likely.

P.S. Nevertheless, be sure to apply early, as soon as October 1st the year before you plan to attend college.  This is because federal student loans are available to everyone.  Therefore, the earlier you apply, the more money you might receive.

Private Student Loans:  Although your application might have processed within minutes, your funds can take anywhere from 2-10 weeks to be received. And there is no guarantee that they will arrive at your school on time for your first-semester payment.  With a private loan lender, it’s 100% your responsibility to apply with ample time before the semester begins.

More than that, sometimes private student loans are deposited into your bank account as opposed to your school’s account balance.  This means you might face additional processing time between your bank receiving the funds and transferring them to your school.

What is the application process for federal and private student loans?

Just like before, this answer differs based on the type of loan you have.  So let’s break it down below:

Federal Student Loan Application Process:

Below you’ll find the necessary items and steps you’ll need to complete the Free Application for Federal Student Aid (FAFSA).  It’s a fairly simple and straightforward process that is the same no matter what school you choose to attend.

Paperwork needed to complete the application: Your latest tax returns as well as that of your parent(s)/legal guardian(s), if you are financially dependent on them.

Step 1) Go to www.FAFSA.gov and create an account.

Step 2) Select your intended loan type (undergraduate, graduate, etc.) and fill out the requested information.

Step 3) Keep an eye on your provided email account for the next couple of days after applying.  You should receive an email from FAFSA confirming that your application was processed and what next steps you should take.

Step 4) Within the next couple of weeks, the schools listed on your application should report your personalized financial packages to you.  Accept or decline them prior to the school’s provided due date.

Step 5) Visit https://studentaid.gov/mpn/ to fill out your Master Promissory Note or MPN.  This is a required agreement to pay back your loans in a timely manner.  Plus, it has other valuable information about being a federal student loan borrower.

Step 6) Attend classes and verify that your funds were disbursed (usually within the first ten days of the semester).  Be sure to stay in contact with your school’s financial aid office if you have any questions or concerns.

Private Student Loan Application Process:

Because private lenders have their own individual rules and policies, these steps and information may vary.  Although this provides a good general idea of what you can expect.

Paperwork needed to complete the application: Your latest tax returns, employment information, list of assets, and/or monthly rent or mortgage information.  The same will apply for your cosigner (explained more below). 

Step 1) Research loan options.  Every private student loan has different interest rates, processing periods, requirements, etc.  You’ll want to do your research to find which private loan lender works best for you. 

For example, call your intended school to ask what private lenders they have worked within the past.  To get you started, you can check out some popular private student loan lenders here: https://lendedu.com/.

Step 2) Get a cosigner.  Although there is a slight chance you won’t need one, private loan companies usually require you to have a cosigner. 

A cosigner is someone that signs the loan with you, promising to pay if you cannot fulfill the agreement.  It’s quite a big responsibility, so make sure you find someone you can trust and who trusts you in return. 

If you feel you can’t find a cosigner, consider applying for a private student loan with Ascent or Funding U.  These are two private loan companies that don’t require cosigners.

Step 3) Gather all necessary paperwork and complete the application(s), at least three months prior to your semester start.

Step 4) If you’re happy with the terms, sign the agreement, and inform your school to ensure all payments process smoothly.  This is also a good time to find out if your loan is a school certified or direct-to-consumer.

School certified loans will automatically be paid to the school for you.  Whereas direct-to-consumer loans will be deposited into your bank account.  This is good information to know so that you’re aware if you must transfer payments to your school. 

Additionally, while reviewing the terms, verify what you’re allowed to spend your private student loan money on.  Is housing including?  What about books, transportation, or food costs?  This is also vital to know so you don’t accidentally commit loan fraud on unapproved purchases.

When do you have to pay back your student loans?

As you likely already know, getting and receiving your loan(s) is just half the battle.  You will also need to come up with a game plan to repay them!

Typically both federal and private student loans allow a six month grace period.  This means six months after you graduate, you are expected to begin repaying on a monthly basis.  Although, there are a few exceptions to this rule.

First of all, if you will be attending school again after graduation, such as to pursue a Master’s Degree, you will be able to defer or postpone payments until you are no longer in school.

Second, all private student loan lenders are different.  While a six month grace period is quite common, check in with your private student loan lender to confirm.

Conclusion

We hope this article gave you all the information you need to apply for your student loans with confidence.  We certainly did our best to answer more than just ‘how long does it take to get a student loan?”  But still, before we go, we want to leave you with a little more advice.

Having applied for student loans ourselves, we have to say, we agree with the opinions of most experts.  And what is that exactly?

Federal Student Loans should always be your first move.  Most of the time federal loans are quicker to process, quicker to distribute funds and have a lower interest rate.  So be sure to visit www.FAFSA.gov at least 3 months before your semester to begin the application process.

Then, if FAFSA happens to reject your request or does not offer you all the money you require, go for private student loans to make up the difference.  

Are you in the midst of applying for or managing your student loans?  What type of loan did you apply for?  How long did it take for you to get your loan?  Any advice for repaying them?  Let us know in the comments below!

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