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Student loans usually have a limit on how much you can borrow. These limits depend on the type of loans you take out, whether you are dependent, and other factors.
No matter how high your limit is, it is best to only borrow what you really need. You should also exhaust your federal loan options first before turning to private loans, as federal student loans come with certain benefits and protections.
Believable lets you Compare interest rates on private student loans from multiple lenders, all in one place.
How Much Can You Get in Federal Student Loans?
The amount you can borrow on federal loans depends on a few factors, including your dependency status and the type of loan you’re taking out. There are three main types of federal student loans available:
- Directly subsidized loans — The US Department of Education continues to pay the accrued interest Directly subsidized loans While you are at least half-matriculated, during periods of leave of absence and up to six months after graduation. The total loan amount is $23,000 for students. For graduate students enrolled before July 1, 2012 (or for prior undergraduate studies), the loan amount was $65,500. PhD students are no longer eligible for direct subsidized loans.
- Direct unsubsidized loans — These loans are available to both undergraduate and graduate students and are not based on financial need. Borrowers are responsible for paying all accrued interest. Your school’s tax office determines how much you can borrow, which is based on your attendance costs and other financial aid you receive. These loans have a total limit of $57,500 for undergraduate students and $138,500 for graduate students.
- Direct PLUS Loans — Parents of dependent students, as well as graduate and professional students, can use these loans for expenses not covered by other forms of financial assistance. You must complete a credit check and your loan limit is your participation cost minus any other financial assistance you may receive.
Credit Limits for Dependent Students
The amount you can borrow per year depends on your academic year. You can borrow up to a total of $23,500 for subsidized loans or $13,500 for unsubsidized loans. For example, you can only borrow up to $3,500 in subsidized loans during your freshman year, but you can borrow up to $5,500 for your third year and beyond.
If you meet either your annual or total loan limit and your parents are not eligible for a PLUS loan, you are eligible for the higher federal loan limits for independent undergraduate students. For example, for your freshman year of high school, the limit is $6,000 in unsubsidized loans once you reach the subsidized loan limit.
Credit limits for independent undergraduate students
An independent undergraduate student is someone who does not have the financial support of their parents and is at least 24 years old, married, or a minor.
As with dependent students, the annual loan limit depends on the type of loan and the year of study. The total loan limit for subsidized loans is $23,000 while the unsubsidized loan limit is $57,500.
Credit Limits for PhD Students
Credit limits include the amount of government student aid you have already borrowed for your undergraduate studies. Graduate students are not eligible for subsidized loans.
- Annual Limit for Unsubsidized Loans — $20,500
- Total Loan Limit — $138,500
Credit limits for Direct PLUS loans
You can borrow up to the cost of participating in Direct PLUS loans.
Because PLUS have higher credit Interest charges Unlike other types of direct lending, it’s best to exhaust all direct, unsubsidized, and subsidized lending limits first. Remember that you will need to go through a credit check as part of the application process.
Borrowing limits for private student loans
Private Student Loan Maximum limits vary by lender, but the maximum amount you can borrow is generally your school’s cost of attendance.
If you have a low or limited credit history, You will likely need a co-signersince private student lenders require a credit check and other financial information (e.g. your income) as part of the application.
If you need to take out personal student loans, visit Credible Compare interest rates on private student loans from different lenders in minutes.
How Much Should You Borrow on Student Loans?
You should only borrow what you really need to pay for your tuition and other educational expenses. Borrowing more means you are responsible for a higher loan balance and associated interest costs. To determine the loan amount, estimate how much you think you will need to cover all of your expenses, including tuition, housing, meal plans, books, and supplies.
To find out how much student loan payments you owe after graduation, it’s a good idea to do so Calculate your future monthly payment. This allows you to prepare and allocate your budget accordingly to ensure you stay on top of your payments.
What if you don’t use all of your student loan funds?
You have several options if you don’t use all of your student loan funds, including:
- Return excess funds. You can return federal student loan funds up to 120 days after disbursement. Unfortunately, you probably won’t be able to return private student loan money. See what options you have by contacting your school or Credit Administrator.
- Apply it to other education expenses. Depending on your loan agreement, you may be able to use your loan funds for other expenses, although federal loans restrict you to certain types.
With Credible it is possible Compare interest rates on private student loans without affecting your creditworthiness.