Last Updated on August 25, 2023

As a student, you are probably aware that there are many ways to obtain your education. One of the most common and accessible options is student loans.

Student loans can be very beneficial for students who need funds for school but do not have access to traditional funding sources such as grants or scholarships. However, it is important for students to understand how these loans work before applying for them.

In this blog post, we will discuss some common questions about student loans and how they work in order to help you make an informed decision about whether or not taking out a student loan is right for you.

How To Pull Out Student Loans

How To Take Out Student Loans For College

Student loans are one of the options students and their families have to help pay for college, but they are a serious financial commitment. It’s important to learn how to take out a student loan so you can make sure you’re borrowing only what you need.

Remember, a student loan is paid back with interest so before committing, make sure you secure as much funding as you can from sources you do not have to repay, such as scholarships, grants, or savings and income.

Taking Out Federal Student Loans vs. Taking Out Private Student Loans

There are two kinds of student loans you can get, federal and private. Federal loans are underwritten by the U.S. government and private loans are offered by private entities, such as a bank.

• To take out a federal student loan, you file the FAFSA, or the Free Application for Federal Student Aid.
• To take out a private student loan, you have to choose a lender and complete their application process.

Consider federal loan options in the student’s name first since they tend to have low fixed interest rates and special benefits only available on federal loans. Then use a private loan to help fill the gap.

Let’s take a closer look at how the process works for each.

How to Take Out a Federal Student Loan

There are three main kinds of federal student loans – Direct Subsidized, Direct Unsubsidized, and PLUS Loans – and the borrowing process is similar for all of them.

1. Fill Out the FAFSA

The first step in taking out a loan for college is completing the FAFSA. The government and some schools use the FAFSA to determine which aid you’re eligible for including grants, work-study, and loans. States and schools also use the FAFSA to determine financial aid offers.

Can student loans be taken out at any time? Well, much of federal, state and school aid is awarded on a first-come, first-serve basis so make sure to complete the FAFSA as soon as it becomes available on October 1st the year before you will enroll. Each school and state have their own deadlines so take note of those important dates.

If taking out a PLUS Loan, there is an additional PLUS loan application that you will file along with FAFSA.

2. Review your Student Aid Report (SAR)

Shortly after filing the FAFSA, you will be mailed a student aid report, which is a summary of the information you provided on FAFSA. Double check the information and make any corrections.

3. Understand Your Financial Aid Award Letters

Schools mail your financial aid offers, which include federal student loans, around the same time they send their acceptance letters.

Review all of the aid you were offered, including which loans you qualified for and for how much. If you applied to more than one school, compare your offers. They may not be the same for every school.

4. Choose Your Loans

Once you’ve compared your options, it’s time to choose a school and decide which loans you want to accept (or decline). Let your school know before the deadline stated on the award letter.

If you have additional questions about your loan options, reach out to your school’s financial aid office for more help on taking out student loans.

How to Take Out a Private Student Loan

If you still need help financing your college education after securing scholarships, grants and federal loans, a private student loan can help cover the difference. Here’s how to take out a private student loan.

1. Research Private Student Loan Lenders

There are many different private student loan lenders, but they all have their own offers. Look for lenders with low interest rates and flexible repayment terms. Do your due diligence by reading reviews and asking for recommendations.

To help you shop, use a student loan calculator to estimate costs based on available interest rates. Another way to get an estimate without impacting your credit is to prequalify, which uses a soft pull of your credit report that does not affect your score. Not all lenders offer this benefit.

2. Find a Cosigner

Having a cosigner with good credit can help you qualify for a private student loan and secure a lower interest rate.

Not everyone who takes out a private student loan needs a cosigner, but it can help if you don’t have credit or good credit. Most undergraduates need one because eligibility for private loans is credit-based and younger students usually haven’t had the time to build up qualifying scores.

3. Choose a Private Student Loan Option

After you’ve shopped around, found a cosigner, and estimated costs, it’s time to apply. Remember that you can apply and take out a loan for school. Remember that you can apply to multiple lenders to see who offers the best rate, but try to apply for private loans within a short period of time.

Each time you apply for a student loan it can count as an inquiry on your credit. Having a lot of inquiries can have a negative, short-term impact on your credit score. But if you apply to several lenders within a few weeks, it will be seen as shopping for the best lender and best rates, and may only count as one inquiry.

Taking Out Student Loans

College is a significant investment. Student loans can help you cover the cost so you can earn a degree and start your career, but they are paid back with interest so it’s important to only borrow what you need.

Before you take out a student loan, make sure to carefully review your repayment options and think ahead about how you will pay it back. Create a budget and stick to a plan so you can repay your student loans responsibly.

how to take out student loans without parents

How to Take Out Student Loans Without Your Parents

You can still take out both federal and private student loans even without your parent’s financial information.

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Getting a student loan without access to your parents’ financial information or credit history may be difficult, but it’s not impossible.

If you’re an independent student then you can borrow federal direct loans. If you have good credit, you can also choose from multiple private lenders. However, if you’re still technically dependent on your parents or you don’t have credit history, your choices are more limited.

No matter your situation, start by filling out the Free Application for Federal Student Aid, known as the FAFSA, and applying for federal student loans. They’re preferred over private loans due to their low interest rates, varied repayment options and loan forgiveness opportunities.

Here’s how you can get a student loan without your parents.

Take out a federal student loan as an independent student

You don’t need any parent information to apply for federal student loans if you’re an independent student. You’ll also have higher federal loan limits. You can borrow up to $57,000 in total federal student loans as an independent student, rather than $31,000 as a dependent student.

The answers you provide on the FAFSA determine your dependency status. If you answer “Yes” to at least one of the dependency questions on the application, you are considered independent. Use this checklist to prepare documents you’ll need to apply as an independent student.

However, you won’t be considered independent just because your parents won’t help with the process. If you answer “No” to all of the dependency questions on the FAFSA, then you’re considered a dependent student, whether your parents will provide their information or not.

Pursue unsubsidized loans without your parents’ information

If you’re considered dependent and don’t have one or both of your parents’ information, you can still apply for federal student loans. You have two possible routes:

1. Get a dependency override. If you provide documentation to the U.S. Department of Education to prove you should be considered an independent student, you could get a dependency override. Approvals are made on a case-by-case basis and will apply only to students with unusual circumstances, such as an abusive family environment or parental abandonment.
2. Apply for aid without your parents. If you don’t qualify for a dependency override but your parents are unwilling to share their information, choose the following option on the FAFSA: “I am unable to provide information about my parent(s).” You then must select the option that indicates you don’t have a special circumstance but can’t provide parent information.

Without your parents’ information, you won’t get an Expected Family Contribution, which usually determines your aid. You will be able to take out an unsubsidized federal loan only, if any loan at all. Your college’s financial aid office will decide whether to lend to you. Contact your school to discuss taking out an unsubsidized loan.

Find another relative or friend to co-sign a private loan

If you need a private student loan to fill a college payment gap, but your parents are unable to co-sign, consider asking a relative or close friend to do so.

Choose a co-signer who can qualify. That means they need a credit score in the upper 600s or higher and a steady income. Make sure your co-signer understands he or she will be required to pay your student loan debt if you can’t.

Private student loans, even with a co-signer, are more expensive than federal student loans because they carry higher interest rates.

Find private student loans that don’t require credit or a co-signer

If you have no co-signer and no credit, but still need a private student loan, look into student loans without a co-signer. Typically, these lenders will consider your future income potential instead of your credit history when deciding whether to approve your application.

Private loans for independent students will carry higher interest rates than both federal loans and private loans with a co-signer. Compare offers from multiple lenders to get the best rate.