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How to Find and Apply for Private Student Loans

Marketplaces can help you find and compare the right loans for college expenses.

After completing your FAFSA, you received financial aid including federal loans and grants, and maybe even scored a scholarship, but you still don’t have enough to cover the cost to attend. This is where private loans step in.

Private student loans are made by private organizations such as banks, credit unions, private lenders, and other financial services companies. You may need private loans and this article will help guide you in applying for one.

What Private Loans Can Be Used For

Private loans can only be used for educational expenses. Generally, you only want to take the amount you need to cover the cost of attending. These expenses may include:

  • Tuition
  • Fees
  • Room and board
  • Books
  • Supplies
  • Transportation
  • Computer for school

Finding Private Student Loans

There are many options to choose from when it comes to private student loans. One thing to keep in mind is that not all private student loans are equal. The terms and conditions of these private loans are set by the lender. They can vary substantially. It’s important for you to find a legitimate and reputable lender.

My recommendation is to start the research close to “home”. Use the following to help:

  1. Speak with your high school counselor about private lenders
  2. Speak with the college and ask for a list of lenders
  3. Call your current financial institution and ask
  4. Ask people you trust for recommendations and do the research

Depending on what level of college you’re attending, there are different types of private loans. Make sure you’re asking based on your college-level: undergraduate, graduate, medical, certification, and continuing education.

How to Apply for Private Student Loans

You can apply for private loans from each lenders’ website. Once you’ve calculated the money needed to cover expenses, you’ll know exactly how much to borrow.

Lenders do not assess a fee to apply and you may want to steer clear of any that do. So what will they ask for in the application process:

  • Your basic personal information and finances
  • You may be asked to apply with a cosigner during the process. If that is the case, you’ll need their personal and financial information to complete the application.
  • You’ll then get to choose the interest rate and repayment option for your loan.

Private Student Loan Marketplaces

One of the best ways to focus your search is using a student loan marketplace. They often provide a simple application to determine your pre-approval and eligibility. That application is cross-referenced with their lending partners and you’re given options to choose from. Marketplaces like LendKey and Credible are the leaders in the area. They work with financial institutions and private lenders.

If you want to focus your search on local banks and credit unions, I recommend using LendKey for your search.

How to Compare Private Student Loans

After researching different lenders, you’ll want to compare and determine which option is best completing the full application.

Some questions to ask when choosing a private student loan:

  • Who is the lender? Are they reputable and been in business for some time?
  • What is the interest rate range?
  • Are there variable or fixed interest rates to choose from?
  • Is there an application fee?
  • Are there origination fees or any other fees?
  • Is there a choice of in-school repayment options?
  • Are there ways to lower the interest rate?
  • Will you be required to have a cosigner? And can a cosigner be released?
  • Are there programs that let you make more manageable payments after graduation?
  • Are there other benefits that make the lender more appealing?
  • Is there an after graduation or out-of-school repayment grace period?

Private Student Loan FAQs

When do I pay back private student loans?

Paying back your private loans dep[end on the terms you’ve signed into. Make sure you read the agreement and clarify the starting date for repayments. Many private lenders allow you to defer payments while in school but others do require in-school repayments too.

Do private loans offer a deferment period after graduating from school?

Some private lenders do offer a grace period similar to federal student loans. The specific terms and length may vary based on your loan agreement. Review and ask. I always find it helpful to highlight key areas of loan agreements.

It may be necessary to delay repaying private loans until after graduation, but if you can get a head start I suggest tackling the debt sooner than later. You want to avoid as much accrued interest on your loans that will balloon your balance.

Do private student loans offer deferment?

Deferment is often associated with federal student loans but many lenders have begun offering borrowers that benefit as well. In order to qualify, you’ll need to meet the private lender’s criteria and often interest will continue to accrue during this period.

What happens if I go back to school?

Some private lenders may offer an in-school deferment of loan payments while in school. Check with your lender.

Where can I apply to find the best private student loans easily?

Use a private student loan marketplace that helps you find, filter, and apply for student loans with multiple lenders with one application. These marketplaces typically allow you to check your rate without impacting your credit score and receive offers. You’ll only continue with the process once you’ve been offered loan options. After selecting a lender, you finalize an application with that lender, get a hard inquiry on your credit, and submit your documents.

You can check our Best Private Student Loan partners and easily apply.

Jason Vitug

Jason Vitug is a bestselling author, entrepreneur, and founder of and His purpose to help others live their best lives through experiential and purposeful living. Jason is also a certified yoga teacher and breathwork specialist and has traveled to over 40 countries.

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