What are the requirements for private student loans?
Key takeaways
- Each private student loan lender will have slightly different requirements, but they will all look at similar factors to consider applicants.
- To be eligible for private student loans, applicants generally must meet certain enrollment, income, credit score, age and expense requirements.
- If you have bad credit, it will be more difficult to qualify for private student loans, but it’s not impossible.
College is more expensive than ever. The average cost of tuition and fees for a full-time undergraduate student attending a four-year institution was $11,610 for the 2024-25 academic year — an increase of 2.7 percent from the prior year, according to College Board’s Trends in College Pricing and Student Aid 2024 report. This figure jumps to $43,350 for students attending a private nonprofit four-year institution, which is almost 4 percent higher than in 2023-24.
So, even after applying for federal student loans, you may still need to cover leftover expenses with private student loans. These loans generally have tougher eligibility requirements than federal loans. In addition to age, income and credit score minimums, students must be enrolled at an eligible school and use the funds for specific expenses.
Private student loan eligibility requirements
Before applying for a private student loan, it’s a good idea to check whether you meet the basic requirements. The five private student loan requirements below are the most common among lenders, although all lenders have different standards. Students who do not qualify independently may qualify by adding a cosigner who meets these requirements.
While a private student loan can be a convenient way to cover expenses while in school, it will eventually need to be repaid. Consider paying for some of your costs with savings, income from a part-time job or college scholarships and grants. These options can minimize your post-graduation costs.
School enrollment
Private lenders typically start with the basics. They’ll first require that you’re a student pursuing education. You’ll also need to attend an accredited school, which typically includes four-year colleges and, sometimes, two-year community colleges and trade schools.
Most lenders also require you to be enrolled at least half-time at your school. However, some lenders have private student loans specifically designed for part-time or career-training students.
The funds must also be used for qualifying expenses, including:
- Tuition and fees
- Housing expenses
- Transportation to and from school
- Meals
- Textbooks and supplies
If you’re not sure whether your school qualifies, ask the lender for a list of acceptable schools or ask about the specific school you’re interested in attending. Your school’s financial aid office can also give you tips on paying for your education.
Credit score
Private lenders typically check a borrower’s financial standing to help them analyze the risk they take by lending money. 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. Because few students have a well-established credit history, many lenders require a cosigner, such as a parent or guardian. Your cosigner’s credit matters more than yours.
Many lenders won’t advertise a specific minimum credit score, but one in the mid-600s or higher can help you or your cosigner meet private student loan credit score requirements. As your credit score increases, you’ll have more borrowing options and may receive a lower interest rate.
If you do not have a cosigner and also lack a high credit score, look into no-cosigner student loans. Some lenders, such as Ascent, consider your grades and future earning potential when approving you for a loan.
If you don’t have the credit history to qualify for a private student loan, you might consider holding off on your application for a few months. Improve your credit to qualify for the loan and get a better interest rate. If you don’t have the time, you may need to apply with a cosigner who meets the lender’s credit requirements.
Income
In addition to credit requirements, lenders typically require a minimum income. Sometimes, it can be as little as $24,000, but the higher your income, the better.
Lenders typically ask for documentation showing your and your cosigner’s employment status and earnings. They will calculate your debt-to-income ratio to see how much of your monthly income goes toward debt.
If you don’t have the income to qualify, look for jobs you can take on while enrolled in school. Alternatively, you can apply with a cosigner willing to take on the responsibility of paying your student loans if you can’t.
Age and citizenship
Most lenders also include requirements surrounding age and citizenship status. An applicant must usually have a Social Security number and be a U.S. citizen or permanent resident.
Borrowers must also be at least 18 with a high school diploma or equivalent, such as a GED. Some states set the minimum age at 19.
If you don’t meet age requirements, ask the lender if you can qualify with an older cosigner. If you’re an international student, you may still be able to qualify for a private student loan with a cosigner who is a U.S. citizen.
How to qualify for a private student loan if you have bad credit
If you’re new to credit or recovering from a setback in your credit history, you might not be in a good enough place to qualify for a private student loan on your own. Most lenders require applicants to have good credit, but you may still be able to qualify through the following methods.
Apply with a cosigner
One common way to get a student loan with bad credit is to apply with a cosigner who has good credit. A cosigner agrees to repay the loan if you can’t, so you share the responsibility for repayment. If you default on the loan, it’ll hurt both your credit score and your cosigner’s credit score.
Apply with a lender that has a low minimum credit score requirement
If you cannot find a cosigner, consider applying with a lender that has a low minimum credit score requirement. For example, Earnest’s minimum credit score requirement is 650, though you’ll need an income of $35,000 to qualify. In addition, FundingU relies on academic progress, career paths and other merit-based factors to make lending decisions.
Federal vs. private student loan requirements
Private student loans can help students fill financial aid gaps, but have stricter qualification requirements than federal student loans. Most private student loans require a minimum credit score and, possibly, a cosigner. Federal student loans do not.
Eligibility requirements are not the only differences between private and federal student loans. Private lenders often use these factors to determine other parts of your loan, like your interest rate and how much you can borrow. Federal loans base terms on the borrower’s financial need and the interest rate is the same for all borrowers, no matter their credit.
| Federal student loans | Private student loans | |
| Eligibility requirements | Based on financial need | Based on financial and credit portfolio |
| Interest rate | 6.53% – 9.08%, based on loan type | 3.47% – 17.99%, based on credit score |
| Loan amount | Up to $57,500 undergraduate and $128,500 graduate – subsidized and unsubsidized direct loans, based on need | $1,000 – 100% cost of attendance, based on financial and credit portfolio |
| Repayment term | 10-25 years | 5 – 20 years |
| Repayment flexibility | Standard, graduated and income-driven repayment plans, potential for loan forgiveness | Standard repayment based on loan amount and repayment term, no potential for loan forgiveness |
Bottom line
Many private student loans require a minimum income or credit score, so borrowers should be prepared for a credit check. They will also want to be sure that their school and enrollment qualify for private loans before borrowing. Many states also set a minimum age for borrowing these types of loans.
Students who are not eligible to borrow on their own may be able to do so with the help of a cosigner.
Comparing private student loan rates, requirements and terms is an important part of choosing a lender. Companies can have different eligibility requirements and repayment terms, so knowing the nuances can save borrowers time and money when making a decision.
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