How Long Does the Process to Get a Student Loan Take?February 26, 2021
When you’re planning to enroll in college, it’s important to organize ahead of time, and learning how student loans work is a great first step. You may also want to consider how long it takes to get a student loan so you can be ready to pay tuition when the time comes.
The length of time it takes to process and disburse student loans can vary, but planning ahead will help you to prepare. Generally, you can expect the whole process to take between a few weeks and a few months, depending on your circumstances.
Does Student Loan Disbursement Time Vary by Loan Type?
How quickly you can get a student loan will vary by the type of loan you’re seeking. Additionally, the process for applying for federal and private student loans differs. Understanding these differences could help you to better understand how quickly you can get a student loan disbursement.
How Long Does It Take to Get Federal Student Loans?
The first step in applying for federal student loans is completing the Free Application for Federal Student Aid (FAFSA). This is how you’ll find out about any federal merit-based scholarships or grants you may be eligible for. Normally, once submitted, you should expect your FAFSA to be processed in about five days.
Once you’ve submitted the FAFSA, you should expect to receive a financial aid package that is customized to your needs in about three weeks. If the details look good, you’ll sign a Master Promissory note to make things official.
One thing not all borrowers realize is that most student loans aren’t disbursed immediately when they’re approved. Normally, federal student loans are disbursed a few days before the start of the semester. If you’re nearing the beginning of the semester and are concerned that your loans haven’t been disbursed, contact your lender for more information.
How Long Does It Take to Get Private Student Loans?
One of the differences between applying for private vs. federal student loans is that you won’t need to rely on the FAFSA. Instead, you’ll apply directly with your lender of choice. Many lenders, including ELFI, even allow you to prequalify to see what type of interest rate you could qualify for.
One benefit of prequalifying for student loans is that it normally doesn’t impact your credit score. Most lenders use soft credit checks for prequalification, then if you decide to move forward with the loan, they may require a hard credit check. Prequalifying for a student loan can help minimize the number of hard credit checks you’ll need.
How quickly you can get a private student loan depends on several factors. Often, it takes about three weeks for the funds to be disbursed after you’re approved. In other cases, though, receiving your private student loans can take much longer. It’s not uncommon for the disbursement process to take two or three months in slower cases.
How Long Do “School-Certified” or “Direct-to-Consumer” Loans Take?
School-certified loans are private loans that undergo a verification process with the chosen college before disbursement. When you’re approved for the loan, your school confirms things like your enrollment status and the estimated cost of attendance. Direct-to-Consumer loans are also private loans but are not verified by the school.
Private loans are either “school-certified” or “direct-to-consumer.” Both types have similar disbursement timelines, which often last between a few weeks and two months.
How to Check on The Status of Your Student Loan Application
Federal Student Loans
Checking on the status of federal student loans is simple. You can view updates to the form by logging into your FAFSA account. If you’ve already been approved to receive federal student loans, then you can contact your lender for more information.
Private Student Loans
The easiest way to check the status of private student loans is to ask your lender. They can provide you with the most up-to-date information regarding your approval and disbursement timelines.
How Long Does It Take to Get a Student Loan Refund?
When your lender disburses your loans to the school, they’ll take out what you owe for tuition and fees. After that, if you have money left over for things like textbooks, they’ll send it back to you in the form of a student loan refund.
These types of refunds can take about two weeks to process. Keep this in mind when you’re planning your application timeline so that you have the funds you need to cover other educational costs.
Considerations When Taking Out Student Loans
Take time to make a plan before applying for student loans. Here are a few things to keep in mind:
- You can prequalify with several lenders to find out what types of interest rates you may be eligible for.
- Be sure you understand what expenses your student loans can cover. Some student loans include limitations on how they can be spent.
- Keep in mind that your loans will accrue interest. Crunch the numbers ahead of time so you aren’t taking out more than you need.
What Happens When I Have to Start Repaying My Student Loans?
After graduation, most students have a six-month grace period. The goal is to give you time to get established before paying back your loans.
During this time, familiarize yourself with your student loan terms so you‘ll know what to expect. If you have federal loans, you may want to explore options like Income-Driven Repayment (IDR) plans or Public Service Loan Forgiveness (PSLF).
If your financial situation improves or interest rates have dropped, then student loan refinancing may also be a good idea. You could lower your interest rate, and even choose a repayment term that better fits your needs.
Try ELFI’s Student Loan Refinancing Calculator to see what you could save.*