How To Apply for a Student Loan Online

The cost of college has increased significantly over the years, so it's no surprise that 50% of undergraduates leave school with debt, according to the College Board. If you need a student loan, applying online is the easiest option. To access federal student loans, complete the Free Application for Federal Student Aid (FAFSA) online. For private student loans, you can apply directly on a lender’s website or use an online student loan marketplace to get multiple offers at once.

Here's a closer look at how to apply for a student loan online, what information you’ll need, and tips for securing the best loan offer. 

Current private student loan rates

Which type of loan should I apply for? 

Before you start applying, consider which type of student loan you need: federal or private. Federal student loans come from the Department of Education and are available to undergraduate and graduate students, as well as parents of dependent undergraduates.  

They have relatively low, fixed interest rates and are eligible for a variety of repayment plans and forgiveness programs. Most federal loans also don't require a credit check, so you can qualify on your own without a cosigner.

Due to these benefits, it's generally a good idea to take out federal student loans before private student loans. 

“Families should always borrow federal loans in the student's name first,” says Robert Farrington, founder of The College Investor. “The student's loans are typically viewed as the best because of access to things like income-driven repayment and loan forgiveness programs.”

The downside of federal loans is that most types come with borrowing limits. If you need more money for school, a private student loan could fill the gap. However, almost all private lenders check your credit and income, so you may need a cosigner to qualify.

How do I apply for a federal student loan online?

You can apply for a federal student loan online by submitting the FAFSA. This process is 100% online, and you can save your information at any point. It takes most people about 30 minutes to complete. 

Here are the steps you'll need to take: 

1. Visit StudentAid.gov: You can fill out the FAFSA online on the Federal Student Aid website. 
2. Create your FSA ID: This is your unique username and password. If your parents are providing information on the FASFA, they'll need their own FSA IDs, too. 
3. Complete the FAFSA: Log in to fill out the FAFSA with your personal and financial details. You might need tax returns, records of child support, bank account balances, net worth of other assets, and your Social Security number. If you're a dependent student, your parents' information is also required. 
4. Review your FAFSA Submission Summary: Once your FAFSA has been processed, which takes 1 to 3 business days, you'll get a FAFSA Submission Summary. This summary will contain four sections: Eligibility Overview, FAFSA Form Answers, School Information, and Next Steps. Review everything to learn about your financial aid eligibility and see if you need to make any corrections or changes to your FAFSA form.  
5. Accept loans through your college financial aid office: The colleges you listed on the FAFSA will use your application to put together a financial aid package, which could include student loans, grants, and work-study. After you determine how much of this aid to accept, you'll notify your chosen school’s financial aid office. 

“To accept the loan, you must complete online loan counseling and sign a Master Promissory Note (MPN),” explains Cathy Lu Espel, a certified financial planner (CFP) at First Horizon Advisors. She adds that the MPN outlines your commitment to repay the loan and includes the loan’s terms and conditions.

How do I apply for a private student loan online?

If you need to take out a private student loan, here are the steps you can take to apply online: 

1. Compare lenders online: Each lender sets its own rates, terms, and eligibility criteria, so it's important to shop around to find your best offer. Some lenders let you prequalify on their website, meaning you can check your rates without any impact on your credit score. You could also use an online loan marketplace like Credible to check your rates with multiple lenders at once. 
2. Choose a loan and complete a digital application: After reviewing your options, complete the online application. You’ll provide details about yourself, your school, and your cosigner if you have one. Most students apply with a cosigner, such as a parent or other trusted adult, to meet credit requirements. 
3. Submit required documents: Upload any documents the lender asks for, such as W-2s, identification, and proof of school enrollment. 
4. Undergo a credit check: With your consent, the lender will run a hard credit inquiry, which could lower your credit score by a few points. If you don’t have established credit, the inquiry will be done on your cosigner’s report.
5. Sign the loan agreement: Once the lender has approved your application, you'll sign your loan contract, which may be called a promissory note. 
6. Receive your funds: The lender will work with your school to confirm its total cost of attendance. Once verified, funds are sent to your school’s financial aid office. After tuition and fees are covered, any remaining money is disbursed to you to use toward other necessary educational costs.

“I always recommend families get three to five quotes and compare options,” says Farrington. “Make sure you're comparing 'apples to apples,' meaning check to make sure the loan terms, length of time, and other features are the same.”

What documents do I need to apply online?

When applying for a private student loan online, you may be asked to provide the following documentation: 

• Social Security number
• Government-issued ID
• School name and program details
• Income documentation, such as pay stubs, W-2s, or tax returns 
• Proof of address, like a utility bill or lease agreement  
• Cosigner details, if needed

For submitting the FAFSA, you may also need: 

• Tax returns
• Records of any child support received
• Current balances of checking accounts, savings accounts, and cash
• Net worth of any businesses, investments, or farms

How long does it take to get a student loan online?

The time it takes to get a student loan online can vary depending on the loan type:

• Federal student loans: It typically takes 1 to 3 days for your FAFSA to process. Then, you'll need to wait for your school's financial aid office to put together your financial aid package. Each school has its own schedule for disbursing loan funds. Some schools send you the funds up to 10 days before the term starts, while others delay disbursement by 30 days for undergraduates or first-time borrowers. 
• Private student loans: It only takes a few minutes to prequalify for a private student loan online, and approximately 15 to 30 minutes to fill out an official loan application. Some lenders may approve your application right away, while others may take longer. The timing also depends on how long it takes for your school to certify your cost of attendance. Depending on the lender and your school, it may take 3 weeks to a couple of months for the loan to be disbursed. 

Tips for comparing student loan offers 

It's important to compare multiple loan offers before choosing a student loan. 

“When selecting a student loan, use online tools to compare lenders,” says Espel. “Prioritize interest rates, then evaluate loan terms such as repayment options, fees, and borrower protections.” 

One of the best tools for comparing lenders is a student loan marketplace like Credible. 

Loan marketplaces let you prequalify with multiple lenders at the same time, so you can compare loan offers side-by-side with no impact on your credit score. Some key factors to compare include: 

• Interest rate: This is the cost of borrowing money, so look for a loan with a low interest rate. You may also consider whether the interest rate is fixed, meaning it stays the same over time, or variable, meaning it can fluctuate with market conditions. 
• Annual percentage rate (APR): This figure can be a more realistic version of your total loan costs, since it includes both interest rate and fees. When comparing multiple loans, look at each one's APR, rather than the interest rate alone. 
• Repayment terms: This is the length of time you have to repay the loan. Terms often range from 5 to 15 years. Longer terms mean smaller monthly payments but more interest overall, while shorter terms come with higher payments but lower total costs.
• Monthly payments: Determine the monthly loan payment amount, taking into account the repayment term and interest rate. Consider whether the amount seems realistic based on your future career goals.