Taking out student loans is one of the best ways to help cover the cost of your college education. There are two types of student loans you can apply for – Federal Student Loans and Private Student Loans. Requirements for loan applications are similar for both, with just a couple of differences between them.

Refinancing allows you to change the terms of the original loan after you graduate. You may choose to refinance to get a lower interest rate, increase your monthly payments and pay off the loan earlier, or lower the monthly payments to make them more affordable. Refinancing involves taking on a new loan to replace the original loan. When applying for refinancing, you’ll need to submit the same documents as you did when you took the original loan and a few more.

Here’s a detailed breakup of the documents you’ll need for federal and private student loan application and for refinancing.

Documents Required for Federal Student Loan Application

Federal student loans are the cheapest type of student loans you will find. They have the lowest interest rate of any type of loan. To apply for a federal student loan, you have to submit the FAFSA (Free Application for Federal Student Aid).

Unlike private lenders, the federal government doesn’t factor in borrowers’ credit history to approve loan applications. These loans are offered solely on the basis of attending a verified university. The documentation asked for is just to verify your identity and to calculate your federal loan eligibility.

Along with the completed FAFSA application, you’ll need to submit these documents to apply for a federal student loan:

• Social Security number – Every bit of your employment and financial history is linked to your Social Security number. Lenders use this information to get an overview of your credit history.
• Valid identification – This is necessary to verify that you are who you say you are. This helps prevent identity theft. The ID you submit must be recently issued, have a clear photograph of you, and list your current address. Valid identification could be a state-issued identification card, or driver’s license.
• Proof of address – The federal government needs this so they know where to send your loan documents and how to contact you if and when necessary.
• Proof of enrollment or other school documentation
• Completed tax returns documents – This includes federal income tax returns, W-2s and any other records of how much money you earned for that year and how much you paid in taxes. If you’re a dependent student, you’ll need to submit your parent’s tax returns.
• Bank statements and records of investments such as real estate, stocks and bonds.
• Records of untaxed income such as interest income, child support and veterans’ non-education benefits.

Documentation regarding your finances is necessary in order to calculate the amount of financial aid that you’re eligible for.

Documents For Private Student Loan Application

Private student loan lenders have different criteria for approving student loan applications. Unlike the federal student loans, it isn’t enough to be enrolled in a university to get a private student loan. Before approving your loan application, private lenders will want to ensure that you will pay back what you borrow. The only way to do this is by evaluating your financials.

The documents required for private student loans are slightly different. You’ll need to submit:

• Social Security number
• Valid identification in the form of a state-issued identity card or driver’s license
• Proof of address
• Bank account and asset information
• Employment and income verification with pay stubs of the last 3 months
• Most recent tax documents
• Current debt payment obligations – This is to ensure that you haven’t already taken on too much debt. If your current payment obligations are too high, you’re more likely to struggle with paying it all back. Most lenders will reject your application under these circumstances.
• Credit score and history – You will not have to submit documents pertaining to credit score and history. You should be aware though that the lender will do a hard credit inquiry to check your credit report before approving you for a loan.

Documents For Student Loan Refinancing

Applying for student loan refinancing is almost the same as applying for a fresh student loan with one difference. When you refinance, you give up your old loan to the lender who then issues you a new loan. The new loan will have a completely different interest rate and different terms and conditions too.

When applying for student loan refinancing, document requirements for loan application are as follows:

• Social Security number
• Valid identification in the form of a state-issued identity card or driver’s license
• Proof of address
• Statement for all the federal and/or private student loans you’re refinancing
• Graduation or degree certificate – Most lenders will only approve your refinancing application if you’ve graduated. This is because graduates are more likely to get higher-paying jobs and less likely to struggle with payments.
• Bank account and asset information
• Employment and income verification with pay stubs of the last 3 months
• Most recent tax documents
• Current debt payment obligations
• Credit score and history

Documents Required When Applying for Student Loans or Refinancing with A Cosigner

This only applies to private student loans. Every private lender sets their own eligibility criteria for approving applications for student loans or refinancing. If you don’t meet their minimum criteria, you may still be able to get a loan if you apply with a creditworthy cosigner. A creditworthy cosigner could be a parent, grandparent, sibling or friend who meets the lender’s requirements.

When you apply for student loan or refinancing with a cosigner, you and your cosigner share responsibility for the payments. In this case, you’ll have to submit basic identification documents but your cosigner will have to submit all the documents listed under “˜student loan refinancing’.

Don’t wait for last minute to gather all the documents you need to apply for a student loan or for refinancing. Keeping the necessary documents ready before filling in your loan application will save you time and help get your application in for approval earlier.