When do most people apply for private student loans?

If you want to use private student loans¹ to cover some or all of your tuition, room and board, and other educational costs, you may apply for them at any time. However, most people wait until the summer months to do so.

Our data shows exactly when there’s a rush of student loan applications—and why. Keep reading to learn more about our findings as well as the best time to apply for student loans and how to speed up the application process.

What the data shows

Historically, the third and fourth weeks of July consistently rank among the top two weeks for private student loan applications at Earnest. Here’s why: Students often scramble to get their applications in before the start of fall semester, which is typically late August or early September. 

In addition, we notice an influx of applications in December and January, before and after the holiday season. Students who apply during this time are usually focused on securing funding for the spring semester, which often starts in mid-to-late January. 

Why this happens

There are a number of reasons student loan applications are popular in the last two weeks of July, including:

• Finalized financial aid packages: The Free Application for Federal Student Aid  (FAFSA) form is usually due on June 30th. By July, most students have completed the FAFSA and received a financial aid letter from their school. If they weren’t awarded enough federal aid, they might turn to private student loans to fill in the gaps.

• Cosigners reviewing terms: Some students choose to apply for private student loans with a cosigner so they can increase their chances of approval and/or lock in a better rate. It may take them until July to find a cosigner and ensure they’ve reviewed the terms of the potential loan agreement. 

• School billing deadlines: Since many students plan to start school in the fall semester, they apply for private student loans in July—hoping they’ll have enough time to collect their funds before the tuition deadline, which is likely mid-to-late August. 

How to be prepared

These tips can help you apply for student loans quickly and ensure you have the funds to cover tuition by the time it’s due.

Determine when tuition is due 

Make sure you know when your tuition will be due. If you’re applying for fall semester loans, for example, your school may require it some time in August. You can likely find this information on your school’s website or student portal but don’t hesitate to contact them directly if you’re unsure. Ideally, you’d apply for private student loans at least a few months before your tuition is due but if you’re unable to or haven’t, your lender may be able to work with you to expedite the application process. 

Shop around and prequalify

Since every private student loan lender has their own unique loans, interest rates, repayment terms, and customer service, be sure to shop around and compare your options. You can also prequalify and get an idea of potential loan offers without hurting your credit. By doing your research, you can hone in on the best private student loan for your unique situation. 

Gather documents

When you apply for a private student loan, your lender will likely require you to submit several documents. If you collect them beforehand, you’ll be able to complete the application faster. Most lenders will request the following:

• Your driver’s license or another government-issued ID

• Your social security number

• Tax forms (yours and/or your parents)

You’ll also need to provide the name and address of your school, your expected graduation month and year, and your desired loan amount and term.

Get familiar with the approval and disbursement process

Approval and disbursement times vary by lender but are important to understand so you can plan accordingly. It may take anywhere from a few hours to a few weeks for your lender to approve your application. It all depends on your particular lender and financial profile. 

Upon approval, it will likely take between 1 to 2 weeks for the lender to disburse your funds. Keep in mind that it may take longer, depending on your school and the loan you choose. 

Reach out to your lender for support

Most lenders are available to guide you through the loan application process and answer any questions that might come up. At Earnest, for example, we have a Client Happiness Team that can support you with your application via phone, email, or chat. Wait times are rarely more than two minutes so you won’t have to wait long to get the assistance you need. 

Respond to your lender quickly

After you apply for a student loan, your lender may contact you to ask additional questions or request more documents. Be sure to get back to them as soon as you can to ensure to avoid delays with approval and disbursement.  

Start your application early to avoid last-minute stress

While there are no private student loan deadlines, applying early can help reduce the risk of potential delays and ensure your lender disburses your funds before you need them. Fortunately, Earnest makes the application process a breeze. To get started, get a free rate check today. It only takes about two minutes and won’t hurt your credit score.

We offer fast approvals, no fees, and a 9-month grace period². You can formally apply online or contact our Client Happiness Team to go through the process over the phone and receive the guidance you might need.

Thinking about applying in July? Apply now to get ahead of the crowd.

This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.

1 Before applying for private student loans, it’s best to maximize your other sources of financial aid first.  It’s recommended to use a 3-step approach to assembling the funds you need: 1) Look for funds you don’t have to pay back, like scholarships, grants, and work-study opportunities.  2) Next, fill out a FAFSA(R) form to apply for federal student loans.  Federal Direct subsidized and unsubsidized loans, excluding PLUS Loan for Parents and PLUS Loan for Graduate and Professional Students which require a credit check and a credit worthy endorser if the parent or graduate or professional student has adverse credit, do not require a credit check or cosigner, and offer various protections if you're struggling with your payments.  3) Finally, consider a private student loan to cover any difference between your total cost of attendance and the amount not covered in steps 1 and 2.  For more information, visit the Department of Education website at https://studentaid.gov/.

2 Nine-month grace period is not available for borrowers who choose our Principal and Interest Repayment plan while in school.