2021 NerdWallet Best-of Awards Winner for Best Student Loan Refinancing Overall Read More
2021 NerdWallet Best-of Awards Winner for Best Student Loan Refinancing Overall Read More


When and How To Apply for Private Student Loans

Andrew Zoeller
how to apply for private student loans
how to apply for private student loans
Purefy’s Honest & Secure Approach
Purefy is 100% free to use with no fees – and your personal information is always encrypted and protected by SHA-256 with RSA Encryption.
When Purefy Gets Paid
Purefy only makes money when a customer completes a loan with one of our partners. This
compensation has no effect on the way lenders appear on our site. We offer a clear and honest
approach to comparing the best lenders. Purefy’s rate estimates are tailored to your information and
are presented with zero bias.
How Your Data Is Protected
Your data security is our priority – which means all data entered into our site is fully encrypted using
industry-best technology (SHA-256 with RSA Encryption). Plus, all information is housed on our secure
cloud servers which are further safeguarded by multiple levels of additional protection such as firewalls,
transport layer security, and Cerberus microcontrollers.
Why Your Data Is Not For Sale
Purefy does not believe in profiting from our customers’ personal information. Your data will never be
sold in any way. Information may need to be shared with our partners so they can complete your
requested services, or Purefy may need to use certain data to reach other student loan borrowers who
need financial support. But rest assured, your data will not be sold to any outside parties.

After scholarships and grants, federal student loans are usually the go-to for financing a college education—and with good reason. The rates are generally competitive, and the benefits are very flexible. That said, sometimes federal student loans will not cover the full cost of a college education, and in some cases, such as with Grad PLUS or Parent PLUS loans, the rates are not as good as with private student loans, for borrowers with excellent credit.

In this article, we will take a closer look at private loans for college—when to use them, how your rate is determined, and how to apply.

When to use private student loans

When your college’s financial aid office sends your award letter, you may find that there is a gap between your scholarships, grants, and federal student loans, and the total cost of your education. Two common ways to fill this gap are:

  • Family college savings – If you or your family have been saving money to help pay for college, this is an easy choice.
  • Private student loans – Take out a loan from a bank or financial institution to cover the difference.

Private student loans are similar to federal student loans—you are still borrowing money for your education and agreeing to pay it back over time. But, instead of the government lending you money, it is a bank or financial institution.

With private student loans, you don’t get federal benefits like forbearance, income-driven repayment plans, and access to Public Service Loan Forgiveness. But, most private lenders do offer flexible repayment plans and have their own unique sets of benefits. For instance, many lenders will offer deferment if you decide to pursue an advanced degree after graduating.

Also, some types of federal student loans, like Grad PLUS and Parent PLUS loans, come with higher rates than other federal loans, as well as sizeable loan fees. For the 2018-2019 school year, federal PLUS loans have a 7.60% interest rate, as well as a loan fee of 4.248%.

Borrowers with excellent credit (or a cosigner with excellent credit) can save a lot of money by choosing a lower rate on a private loan, if the federal benefits aren’t as important to them. If you are a graduate student or parent with excellent credit who already has good job security and just wants the best rate possible, private student loans may be the best option. All of Purefy’s lenders have no origination fees or prepayment penalties.

How your private student loan rate is determined

Each lender has its own set of criteria for determining your interest rate, but usually the biggest factors are the type of degree you are pursuing and your credit score.

Your credit score, which is based on your credit history, basically tells lenders how good you have been over time in managing your debt and making payments on time. Unfortunately, most students—particularly undergraduates—don’t have much of a credit history and will require a cosigner to get approved.

A cosigner is someone who signs on to the loan, and is equally responsible for it, should you be unable to make the payments at any point in the future. Usually this is a parent or relative. Having a cosigner with great credit will help you get the best rate on your private student loan.

How to find the best private student loan rate

The best way to find out what kind of rate you will get and see your future monthly payments is to use Purefy’s rate comparison tool. This tool is essential because it lets you compare actual rates from multiple lenders, based on an estimate of your (or your cosigner’s) credit score, and a few other basic details.

Most comparison sites online only include rate ranges, which tell you little to nothing about the actual rate you will receive when you get a private loan for college. Even a difference in your interest rate as small as 1% can have a huge impact on the total cost of the loan over time. Our tool lets you see this difference with total transparency.

Find savings from the best lenders with Purefy

Compare Student Loan Refinance Rates with No Impact to Your Credit Score

1 Step 1: Education
3 Step 2: Personal Information
4 Step 3: Get Your Rates
  • What type of degree are you pursuing?

    Why do we ask? Degree Type

    Some lenders determine your eligibility and interest rate based on the type of degree you are pursuing. Please list the degree you are pursuing, not a degree that you already have.

  • How many years until you get your degree?

    Why do we ask? Years Until Graduation

    The amount of time you will be in school affects your loan balance upon graduation and your monthly payment after graduation, depending on the repayment option you select.

How to apply for private student loans

Once you’ve gone through our comparison tool and selected a lender, you will be directed to their application, where you will be asked for information about yourself and your cosigner (if applicable). This usually will include:

  • Contact information
  • Social security number
  • Employment and income information
  • School information
  • A reference (someone who the lender can contact to help find you if your contact info changes)

After you apply, you and your cosigner will be asked for documents to verify the information listed on your application—items such as a photo ID and paystubs or tax returns. Once everything is approved and you’ve signed your credit agreement (also called a promissory note), your funds will be sent out.

The application, approval, and disbursement process can take anywhere from a few weeks to two months. While you can apply any time during the year, we recommend you allow enough time to get through the process and meet your tuition deadlines.

And, as always, if you’ve applied already or if you just have questions, you can always feel free to reach out to our award-winning customer service team at 202-524-1115, by email at [email protected], text at 202-900-9014, or by web chat.

Find savings from the best lenders with Purefy

Compare Student Loan Refinance Rates with No Impact to Your Credit Score

What is your loan type?

Student Loan Refinancing
Parent Loan Refinancing
You Might Also Like

What is your loan type?

Student Loan Refinancing
Parent Loan Refinancing