What are the private student loan borrowing requirements? (2024)

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What are the private student loan borrowing requirements? (2)

There's no denying the fact that a higher education can open the door to a higher income. According to the United States Social Security Administration, men with a bachelor's degree earn about $900,000 more over their lifetime than men with a high school diploma, while women with a bachelor's degree earn an average of $630,000 more than women with a high school diploma.

So, even with education costs on the rise, a college degree is typically a wise investment. Student loans give you the ability to make an investment in your education today and pay for that investment in the future — usually when you're making more money. And, while there are both private and federal student loan options, there are a few reasons why it could make sense to chooseprivate student loans over federal options.

For example, you may not qualify for a federal student loan because your parents earn too much money, you may have borrowed the maximum amount of money they allow or there could be another reason these loans simply don't work in your situation. In these cases, private student loans may be an effective alternative. But you'll have to meet borrowing requirements to borrow money with a private student loan. So, what are the borrowing requirements you'll need to meet to qualify for a private student loan?

Find out the private student loan rates you could qualify for today.

What are the private student loan borrowing requirements?

As mentioned above, you'll need to meet qualification requirements to take advantage of a private student loan. Here are the requirements you'll likely need to meet to get approved:

Educational requirements

Student loans are designed to help you cover the cost of a higher education. That means you'll typically need to pursue a degree or certificate to qualify for them, but that's not true in all cases.

For example, while you'll need to attend an accredited school to qualify for a federal student loan, that may not be the case for private loans, though it depends on the lender. So, you might be able to qualify for a private student loan even if you want to enroll in an unaccredited or non-degree program.

Apply for a private student loan now to take your education to the next level.

Income requirements

Your income will also likely play a role in your ability to qualify for a student loan. After all, lenders want to know that even if you don't achieve your desired degree, you have enough income to pay the loan back. For example, Earnest requires you to earn at least $35,000 per year to qualify for their student loans. However, some lenders may offer student loan approvals to applicants with lower incomes.

Credit score requirements

As with most other loans, your credit score will likely play a major role in your ability to access a private student loan. You'll typically need a 620 or higher credit score to qualify for a private student loan, though there may be options for borrowers with bad credit.

However, your credit score isn't just a qualification requirement; it's also a primary factor in your private student loan cost. Higher credit scores typically equate to lower interest rates, and even a small reduction in interest can result in thousands of dollars in interest savings over the life of your student loan.

So, even if you meet the minimum credit requirements, it may be wise to take steps to improve your score before you apply for a private student loan.

Age and citizenship requirements

While it varies by lender, you'll typically need to either be a citizen or permanent resident of the United States who is at least 18 years old (or 19 in certain states) to qualify for a private student loan. It's worth noting, though, that some lenders will have specific age requirements for borrowers.

Some lenders may also offer loans to non-citizens or international students, but you could need to meet other requirements, like having a cosigner, to qualify.

What if you don't qualify for a private student loan?

If you don't qualify for a student loan on your own, there are a few things you can do to gain access to the money you need to further your education:

  • Get a cosigner: Consider asking your parents, grandparents, or spouse to cosign your application with you. If your cosigner meets the borrowing requirements, they may be the key to approval.
  • Improve your credit score: If your credit score is holding you back from loan approval, consider taking steps to improve it. Make an effort to settle any past-due debts you have and make all future payments on time. If you have a limited credit history, consider opening a secured credit card to start building a credit history.
  • Increase your income: If your income is holding you back, it may help to increase it. Consider asking for a raise or working a side gig to earn more money.

The bottom line

A college education can significantly increase your earning potential over your lifetime. So, it may be worth taking out a private student loan to access the money you need to pay for your education. And, if you don't qualify for the loan you're looking for, consider taking the steps above to improve your chances of approval.

Joshua Rodriguez

Joshua Rodriguez is a personal finance and investing writer with a passion for his craft. When he's not working, he enjoys time with his wife, two kids, two dogs and two ducks.

What are the private student loan borrowing requirements? (2024)


What are the private student loan borrowing requirements? ›

Eligibility requirements for private student loans include: The borrower must be creditworthy or have a creditworthy cosigner. More than 90% of private student loans to undergraduate students and more than 75% of private student loans to graduate students are made with a creditworthy cosigner.

What do you need to qualify for a private student loan? ›

Must have a minimum credit score of 680. Must have a minimum credit history of 36 months. The student must be enrolled at least half-time in school. For Parent Loans, the borrower must meet Qualifying Dependent requirements (learn more).

Is it hard to get approved for private student loans? ›

They'll run a credit check to see how you've handled debt in the past. It can be tough to qualify independently without a credit history or a limited one. Many lenders won't advertise a specific minimum credit score, but a score in the mid-600s or higher can help you meet private student loan credit score requirements.

How much can I borrow for a private student loan? ›

Private student loan limits

Unlike most federal loans, with private lenders, like Earnest1, you can borrow up to 100% of the school's certified cost of attendance, including money to cover the cost of textbooks, housing, and even transportation. And, there aren't aggregate loan limits.

What are the limitations on private student loans? ›

Higher borrowing limits

The lifetime maximum is $31,000 for dependent students and $57,500 for independent students. With private loans, however, you can typically borrow up to the total cost of attendance, minus any financial aid received, every year, giving you more flexibility to get the financing you need.

Can I get a private student loan without my parents? ›

Private Student Loans

In the rare case that a student does earn enough and meets the credit score requirement, it could be possible to qualify on their own. In most cases, though, to get a private student loan without a parent you'll have to find someone else who is willing to co-sign for you.

Can a student get a private loan without a cosigner? ›

Private student loans without a cosigner are available if you've maxed out your federal student loans and need additional funding. Most no-cosigner lenders allow you to prequalify with a soft credit check to determine your eligibility before you submit a full application.

How long does it take to get a private student loan approved? ›

Once you submit your application, you could be approved for a private student loan in as little as a few minutes. But if your application requires further review, it could take up to two weeks before the lender lets you know whether you've been approved (or if there are other conditions you need to meet first).

What credit score does Sallie Mae require? ›

The average credit score for approved Sallie Mae borrowers is around 748 for undergraduate student loans. That's pretty high – but don't panic if your credit score is much lower than that. You'll need a minimum credit score (or have a cosigner with a minimum credit score) that is somewhere in the mid-600s.

What is the average private student loan balance? ›

Education debt balances by state
StateAverage student loan debt
New York$37,531
47 more rows
Jan 23, 2024

What GPA do you need for private student loan? ›

Yes, there are private student loan providers that don't have GPA requirements for their loans. Unlike federal student loans which are based on financial need and generally don't have academic requirements, private loans may have various qualifications depending on the lender, though many don't require a minimum GPA.

What is a good private student loan interest rate? ›

Compare the Best Private Student Loans
LenderFixed APR
View DisclosureEarnest 4.84.11% to 15.90% with autopay
View DisclosureCredible 4.54.07% to 15.71% (with autopay)*
View DisclosureSoFi 4.74.44% to 14.70% with autopay
View DisclosurePNC 4.2As low as 6.69% with autopay*
7 more rows

What is the 7 year rule for student loans? ›

If the loan is paid in full, the default will remain on your credit report for seven years following the final payment date, but your report will reflect a zero balance. If you rehabilitate your loan, the default will be removed from your credit report.

Do private student loans go away after 7 years? ›

Private student loans don't go away unless you pay them off, but in most cases, they'll fall off your credit report after seven years.

What happens if I don't pay back private student loans? ›

If you're unable to make your private student loan payments, the lender can report your default to consumer reporting agencies, which could harm your credit. They may take different actions to collect the debt.

Why would someone get a private student loan? ›

You'll likely want to turn to a private student loan lender if your Free Application for Federal Student Aid (FAFSA) application was rejected, you're ineligible for financial aid, you didn't receive enough assistance or you need funding for other educational expenses.

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