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When Do I Need to Apply for Private Student Loans?

Some students need more money to pay for college than they qualify for in federal loans. Learn more about when to apply for private student loans.

Paying for college can be a challenge for most students. With tuition costs rising faster than inflation, students often turn to student loans to pay for college expenses. While federal student loans have specific deadlines and maximum borrowing limits, private student loans offer more flexibility to meet your needs. Here's how to know when to apply for private student loans.

What can private college loans be used for?

Private college loans help cover the costs of attending school and other expenses that students face, including housing, food and books. Here's a quick rundown of some of the ways that students spend their student loan money:

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

How much money should you borrow with student loans?

Ideally, students should borrow the smallest amount possible that allows them to pay for school. Many students supplement their student loans with side jobs, grants, savings and money from relatives to cover their expenses. Remember: All the money that you borrow must be paid back at some point. And some student loans start to accrue interest right away, which means that your balance will be higher when you graduate than the amount that you borrowed.

When to apply for private student loans

There are many reasons a student may apply for private student loans. The best approach is to apply for private student loans as soon as you've enrolled in school and know how much money you'll need.

Deadlines for private student loans vs. federal loans

For the 2022-2023 school year, the Free Application for Federal Student Aid (FAFSA) deadline is 11:59 p.m. CT on June 30, 2023. And, if you need to make corrections, the deadline is 11:59 p.m. CT on Sept. 9, 2023.

Additionally, if you want to receive priority consideration on your student loan and grant request, you need to submit your application much earlier. Financial awards are generally made until funds are depleted, so if you submit your application too late, you may miss out on the money that you qualified for. States and colleges may have earlier deadlines in order to get federal student loans to pay for college, so verify the FAFSA deadlines by state.

With private student loan lenders, there isn't a set deadline. When you have a financial need, submit an application and wait for your approval. However, you shouldn't wait until the last minute to apply for a private student loan. It takes time for the lender to process your application and disburse the funds. You don't want a situation where a payment is due but you're waiting for your loan to fund.

Can you apply for student loans before being accepted?

Yes, you can (and should) apply for federal student loans right away. One application will cover your student loan request, regardless of the school you decide to attend.

However, you must wait until you receive your financial aid award letter from the school before you can apply for a private student loan. This letter details your financial need, and it is provided by the school once the school has accepted you. Most colleges send the letters out with plenty of time to apply for your private student loan, so don't worry about being rushed.

Need more money than federal student loans offer

In some cases, students need more money to pay for college than they qualify for through federal student loans. Undergraduate students who are dependents of their parents can borrow a maximum of $7,500 per year, while independent students can borrow up to $12,500 per year. And graduate students can borrow a maximum of $20,500 per year. If your financial needs are greater than these annual loan limits, you may need to turn to a Parent PLUS Loan or a private student loan to fill the gap.

Parental income impacts financial aid

If your parent makes too much money, you may be disqualified from receiving certain financial aid, scholarships and grants. Many middle-class families make too much money to qualify yet don't have enough to help their children pay for school. When that happens, private student loans can help meet your financial needs for tuition and other costs of attending college.

When to apply for private student loans for 2022-2023 school year

If you want to apply for private student loans for the 2022-2023 academic year, apply as soon as you receive your financial aid award letter. This letter from the college details the expected cost of attendance for each student, which helps you decide on the loan amount you need to pay for school. Unlike federal government loans, there are no specific deadlines for private student loans. However, the sooner you compare private student loan offers and apply for your loan, the quicker you'll receive the money.

Receiving the money quickly will allow you to pay your tuition, buy books and get ready for the new school year. The start of a new school year can be stressful enough for students without adding financial worries about the total cost of college on top of it.

Benefits of applying for private student loans

In addition to the timing benefits of applying for private student loans, student loan borrowers have other reasons for doing so. These are some of the most common:

  • Don't have to complete a FAFSA: The FAFSA requires substantial private financial information that some families may not want to share. Additionally, not all parents are cooperative with the needs of a student borrower.
  • Interest rate options: Private student loans offer both fixed interest rate and variable interest rate options.
  • Repayment options: When borrowing from private student loan lenders, you may access different repayment options that federal student loans don’t offer. These repayment plans can lead to lower monthly payments that are easier to manage.
  • Adding a co-signer: Borrowers may add a co-signer with a good credit score and solid credit history. Adding a co-signer to the application creates a stronger financial position for the application. A co-signed credit application can result in lower interest rates and better loan terms for your monthly payments over the life of the loan.
  • Lender options: There are many private student loan lenders, including banks, credit unions and online options. Borrowers should research lenders to find the loan terms and loan payments that best fit their needs.

The bottom line

The best time to apply for private student loans is when you are accepted to college and receive a financial aid award letter. This letter details the cost to attend the college and how much money you may need to borrow. There are numerous reasons a student may apply for private student loans, even if they qualify for federal student loans, scholarships and grants. In some cases, private student loans can cover the financial gap between those sources and the actual cost of attending school.

If you find yourself in need of a private student loan, consider joining Juno. Juno offers private loans for undergraduate and graduate students and guarantees you won’t find a better private student loan interest rate than the deal it brings you from its lending partner. 

Lee Huffman

Written By

Lee Huffman

Lee is a travel writer and podcast host based in Nashville, Tennessee. Lee spent 18 years in banking and investments and now uses that insider knowledge to write about credit cards, travel, and other personal finance topics.


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