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The cost of higher education has never been higher. Full-time undergraduates at four-year in-state public schools paid an average of $11,950 in tuition and fees for the 2025-26 academic year—up $340 from the year before, according to College Board's Trends in College Pricing 2025 report. At private nonprofit four-year schools, the average reached $45,000, a $1,750 increase from the previous year.
If your college savings won't cover your costs, federal student loans are almost always your best option to pay for the rest. Often, though, even federal loans aren't enough, and you may need a private student loan to make up the difference. To qualify for a private student loan, you'll likely need to meet requirements around credit score, income and more. Here's what you need to know.
What Are the Requirements for a Private Student Loan?
While the requirements for a private student loan vary by lender, most lenders evaluate the following core factors before deciding whether to approve your application.
Personal Requirements
You'll need to meet some individual requirements to qualify for a private student loan, such as:
- Age: You must meet the lender's minimum age requirement, or the age of majority in your state. That's the age when someone is considered an adult, usually age 18.
- Citizenship: As a general rule, private student loans require you to be a U.S. citizen, a permanent resident or an international student with a visa.
Credit Score and History
There's no set credit score you need to qualify, but lenders typically look for a minimum score of 670. It is possible to get approved for a private student loan with bad credit, but a higher score improves your chances of approval and a lower interest rate. If your credit is poor, consider applying with a cosigner.
Tip: Before applying for any loan, including private student loans, review your credit report and look for ways to improve your credit to boost your chances of approval.
Income and Debt
Even if you're not earning much, having a source of income can help you qualify. Lenders may also look at your debt-to-income ratio (DTI). This ratio compares your gross monthly income with the amount you owe on your debts (the sum of your minimum payments) each month. Private student loan lenders often look for a DTI ratio under 36%, but some allow up to 43%.
While federal student loans don't require a steady income, private lenders may want to see at least $35,000 in annual income. If you can't meet income and debt thresholds on your own, you may want to include a cosigner's income and debt information when you apply.
Learn more: How Student Loans Affect Your Debt-to-Income Ratio
Enrollment Rules
Before approving your loan, the lender may contact your school to verify your enrollment. Most private lenders require you to be enrolled at least half-time, which is typically six credit hours per semester. Your school must be eligible for federal aid, as most lenders require Title IV accreditation. Some lenders may exclude certain certificate programs, unaccredited trade schools and non-degree programs
Federal vs. Private Student Loans
Federal student loans make up roughly 92% of all student debt, with the remaining 8% from private student loans. While both share similarities and can help cover your education costs, federal and private student loans are also distinctly different.
Federal Student Loans
As a general rule, Department of Education-funded loans should be the first option for students seeking loans, as most don't have credit requirements. Federal loans currently have a 6.39% interest rate for undergraduates and usually charge less in interest and fees than private loans. With a subsidized federal student loan, the interest won't accrue until after you've graduated. And with both subsidized and unsubsidized loans, you won't have to make payments while you're in school.
Another big benefit of borrowing from the federal government is your ability to access flexible repayment programs if you ever have trouble making loan payments. You may have more time to repay federal loans or even be able to delay or reduce your payments based on your income. Some borrowers may also qualify for forgiveness on some or all of their student loan debt.
Private Student Loans
Private student loans can help when federal loans don't cover your full education bill. Private lenders tend to offer larger loan amounts and have fewer restrictions on how you use the money.
The tradeoff is that private loans usually come with higher interest rates. Rates may also be variable, so your rate could increase substantially in the future. Unlike federal loans, interest typically accrues on private student loans while you're still in school, and some lenders require you to make payments before you graduate.
Private loans generally don't offer forgiveness programs, and your repayment options are far more limited than what you'd get with federal loans. Because of this and the higher costs, it's best to exhaust your options—including federal loans, grants and scholarships—before applying for a private loan.
Here's how federal and private student loans compare in a nutshell:
| Federal Student Loans | Private Student Loans | |
|---|---|---|
| Lenders | U.S. Department of Education | Banks, credit unions and online lenders |
| Credit requirements | No minimum credit score required | Lenders typically don't publish their minimum credit scores, but a score of 670 or higher is recommended |
| Borrowing limits | Up to $5,500-$7,500 per year for undergraduates, depending on year and dependency status | Varies by lender but can cover a school's total cost of attendance |
| Loan repayment and forgiveness | Offer Public Service Loan Forgiveness (PSLF), income-driven repayment plans, deferment and forbearance | Lenders may offer forbearance and deferment |
| Best for | Most students due to their low rates, flexible repayment options and forgiveness programs | Students and parents who don't qualify for enough federal aid or need additional funding |
Where Can You Get a Private Student Loan?
Private student loans are widely available at many banks, credit unions, online lenders, state-based agencies and schools. Loan terms, the amount you can borrow and qualifying uses for the money can vary greatly from one lender to the next, so shop and compare several lenders to find the best overall loan.
Here are a few places to search:
- Online lenders: Most lenders list interest rates ranging from the upper 2% to nearly 18% on their websites. The rate you're eligible for depends on your credit, your cosigner's credit and other factors.
- Your school: Contact your school's financial aid office to find out which loans the school offers directly and if there are any state agency loans available. You can also ask if the school has a list of lenders who work with them.
- Your bank or credit union: The financial institution you already do your banking with may offer low-rate student loans. Many banks and credit unions also offer discounts to qualified customers.
When you're ready to begin applying, you can submit applications through most lenders' websites. Be prepared to share personal and financial information, plus details about your cosigner, your school, your degree and how much you plan to borrow.
How Can Private Student Loans Affect Your Credit?
Private student loans affect your credit report in a couple of ways, including:
- Hard inquiries: Applying for a private student loan triggers a hard inquiry on your credit report, which could cause a temporary dip of less than five points on your scores.
- Payment history: This one's more serious. A late payment can negatively affect your credit score, and missing a payment can cause more serious harm. Either will stay on your report for seven years. However, paying on time every month can help you build a strong credit profile as your payment history makes up 35% of your FICO® Score☉ Θ, the score used by 90% of top lenders.
Tip: Before you formally apply, consider getting prequalified with a few lenders first. Each lender will run a soft inquiry, which won't affect your credit scores, and provide an estimate of the loan terms and amounts you may qualify for.
Frequently Asked Questions
Are There Private Student Loans for Bad Credit?
Yes, some lenders offer private student loans to borrowers with bad credit or a thin credit file, but they're likely to charge higher interest rates. A creditworthy cosigner may help to improve your odds of approval and more favorable terms.
Remember, you don't need a minimum credit score for federal student loans. That, combined with lower interest rates and more favorable repayment options, makes federal loans the best place to start.
What Are Private Student Loan Interest Rates?
While the interest rate for federal student loans for undergraduates is 6.39% for loans disbursed between July 1, 2025, and June 30, 2026, private student loan rates vary widely for both fixed and variable rates. Fixed rates typically range from the high 2% to 18%, while variable rates run from mid-3% to 18%. If you're approved, the rate you receive will depend on your credit, income, cosigner and loan term, among other factors.
The Bottom Line
Private student loans can help you pay for college when your savings and federal student loans aren't enough. That said, it's important to safeguard your financial future by limiting borrowing to only what you need. Look into other ways to pay for college and make money as a student to cover living expenses. These steps can help reduce your reliance on student loans, which could make it easier to repay them after graduation.