Private student loans can make going to college a reality for many students, but when should you take one out?
Key Takeaways:
- Apply for private student loans 4-8 weeks before tuition is due to allow time for approval, school certification, and fund disbursement.
- Check your school’s financial aid deadlines—every institution sets different tuition due dates, so confirm exact timing with your financial aid office.
- Apply early once you know your funding gap, after accounting for scholarships, grants, and federal loans, to ensure your loan is processed on time.
- Use College Ave’s prequalification tool to estimate your rate and confirm eligibility before applying—without impacting your credit score.
All college students should fill out the Free Application for Federal Student Aid (FAFSA) when they enroll in school, regardless of financial need. This is the first step to see if you’re eligible for financial aid beyond federal student loans such as grants, scholarships, and gift aid. Once you’ve exhausted all of your federal and free money options, then you can consider taking out a private student loan to fill your funding gap.
Why Start with the FAFSA Before Private Loans
FAFSA opens the door to federal financial aid including grants, work-study programs, and subsidized or unsubsidized federal student loans. These federal options often come with important borrower protections such as fixed interest rates, income-driven repayment plans, and potential loan forgiveness programs. In a 2025 College Ave survey of 1,060 undergraduate students, findings revealed that 41% of students were paying for college using Federal student loans.
By submitting the FAFSA as early as possible, students maximize their chances of receiving need-based aid, especially since some grant funding is awarded on a first-come, first-served basis. Before exploring private student loans, students should evaluate their full financial aid package to determine whether any federal funds remain untapped. This ensures that they are leveraging every available source of low-cost or no-cost aid before borrowing privately.
Once you’ve exhausted all of your federal and free money options, then you can consider taking out a private student loan to fill your funding gap.
How to Determine Your Borrowing Gap
To figure out whether a private student loan is necessary—and how much to borrow—start with your school’s cost of attendance. Subtract all grants, scholarships, and your federal student loan eligibility from this total. What remains is your funding gap. Keep in mind that borrowing more than you need can lead to unnecessary debt. A good rule of thumb is to borrow only what you expect to be able to repay comfortably after graduation, based on your anticipated salary.
Many private lenders will let you borrow up to the full cost of attendance as certified by your school, but the actual amount you should borrow depends on your personal financial situation. Creating a simple worksheet with your tuition, housing, supplies, and personal expenses can help you make a data-driven decision about whether and how much to borrow.
Private student loans are one option families can use to help pay for college. Here are some instances when it can make sense to take out a private student loan.
Use Private Student Loans to Fill a Funding Gap
One of the primary reasons students decide to take out a private student loan is when other financial aid doesn’t cover all of the college costs. For example, federal student loans come with limits, and for many students, federal student loans don’t cover their entire cost of attendance. Once you’ve exhausted scholarships, grants, and federal loan options, a private student loan can help you get the extra money you need for college. Before you borrow, just make sure you’ve done the math and can expect the investment in your education to pay off.
Learn more about how to repay private student loans.
Private Student Loans Can Pay for a Summer Session
Taking summer classes can be a good strategy for graduating faster, getting into the workforce sooner, finding smaller classes, or taking a course that fills up during the school year. Many students use their federal student loans and other financial aid to pay for fall and spring, leaving them short for a summer session. If there is significant value in taking a summer course, a private student loan might be a solution for you.
Learn more about how much you can borrow with student loans.
A Private Loan Can Help If Your Expenses Suddenly Change
College can be unpredictable and incredibly taxing on your mental health. According to the College Ave survey, the word most students associated with their finances was “stressful.” Sometimes you need help covering last-minute costs or other bills. For example, your roommate might suddenly decide to move out, leaving you with the other half of the housing expenses. Or your computer dies halfway through the semester. Before turning to a high-interest credit card to make ends meet, explore options like a private student loan.
Don’t forget that your school considers expenses related to your education, like room and board, transportation, and supplies into the cost of attendance, and student loans can be used to cover those related costs.
Learn more about what student loans can be used for.
Look at Private Student Loans when Federal Parent PLUS loan falls short
The federal government offers Federal Direct PLUS loans to parents who want to pay for school. You’ll need to fill out the FAFSA and have no adverse credit history to qualify. PLUS loans have annual borrowing limits and come with higher fees.
Private lenders use your credit history to determine your interest rate. So, if you’re considering taking out a PLUS loan, it could make sense to shop around for a private student loans if you have good credit and a steady income. Some private lenders, such as College Ave, do not charge origination loan fees.
Use our student loan calculator to see what a loan could cost you.
Comparing Private Lenders: What to Look For
When it comes to choosing a private lender, not all options are created equal. College Ave stands out by offering student-friendly features designed to make borrowing simpler and more affordable. Unlike some lenders that charge origination fees or have rigid repayment terms, College Ave offers zero origination fees, no prepayment penalties, and highly flexible repayment options—including the ability to start paying early, pay interest only while in school, or defer until after graduation.
For students and families looking to plan ahead, College Ave also offers a quick and easy prequalification tool that lets you see your personalized rates without impacting your credit score. And if you’re applying with a cosigner, you can take advantage of their cosigner release option after meeting certain criteria. While it’s smart to compare lenders, you’ll find that College Ave checks all the boxes for a transparent, low-stress borrowing experience.
When to Apply For Private Student Loans
At whatever time your school’s tuition due date falls, about 30 days prior you should submit an application for a private student loan. The exact time to apply for private student loans varies, because every school has a different tuition due date. The best thing you can do is check with your school’s financial aid office to nail down exactly when you should submit your private student loans.
You can apply for a private student loan at any time. A general rule you should follow is that the earlier you submit your student loans, the better off you are to ensure the funds arrive on time.
One way to help you decide when to apply for private student loans, or if you should take out a private student loan is to use our prequalification tool. It will show you if you and your cosigner qualify for a private student loan and what interest rates to expect before you apply. Prequalifying does not impact your credit score.
Typical Timeline: Applying for Private Student Loans
While private student loans can be applied for year-round, timing matters. Most lenders recommend applying 4-8 weeks before your tuition payment is due. This allows time for approval, certification by your school, and disbursement. A typical timeline might look like this:
- Spring: Receive your financial aid offer from your school
- Late Spring/Early Summer: Calculate your funding gap
- 1-2 Months Before Tuition Is Due: Apply for your private loan
- 2-4 Weeks Before Classes Begin: Funds are certified and disbursed
If you’re enrolling in a summer session or starting school mid-year, your timeline may be shorter—so contact your financial aid office early. Delays in paperwork or missing documents can slow the process, so it’s best to get started as soon as you’re clear on how much you need.
Grace Periods, Repayment Options and Long-Term Considerations
The College Ave survey found that 67% of those who expected to have student loan debt post-graduation didn’t know or were unsure of how much their monthly payments would be. Additionally, nearly 7 in 10 students felt like they needed to find a job as soon as possible.
Every lender has slightly different repayment terms, so it’s important to know when repayment begins. Some private student loans allow full deferment while you’re in school, while others require interest-only or fixed payments. You should also ask whether there’s a grace period after graduation before repayment kicks in.
Use loan calculators to forecast your monthly payments and make sure they align with your expected post-graduation income. If a lender offers flexible repayment options or hardship protections, that’s a big plus. Just because you’re approved for a certain amount doesn’t mean you should borrow the full amount—borrow wisely based on your future financial goals.
Funding Your Education with College Ave
Paying for college is a major financial decision, and deciding when to apply for private student loans can be a smart way to bridge the gap when federal aid isn’t enough. At College Ave, we’re committed to making the loan process easy, clear, and tailored to your needs. With competitive rates, no origination fees, and flexible repayment options, we help take the financial stress out of college funding. Use our prequalification tool today to see your options without affecting your credit score—and take one step closer to making college affordable on your terms.
For more information about private student loans, visit our Private Undergraduate Student Loans page.
About the Survey
The College Ave survey was conducted by Barnes & Noble College Insights™. The national online survey of undergraduate students who attend a 4-year college or university at one of the campuses served by Barnes & Noble College had 1,060 respondents and was fielded in February – March 2025. Last year, Barnes & Noble College Insights conducted more than 50 research studies and 100+ survey polls of students, faculty and parents that interact with one of its more than 770+ campus bookstores across the nation.
