5 common private student loan mistakes to avoid this summer

By Anna Baluch | Published on October 21, 2025

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Summer is peak borrowing season. As you gear up to apply for private student loans1 in the coming months, a bit of planning can go a long way. By being mindful of the top private student loan pitfalls, you can borrow smart and keep your finances in check. Here are the most common private student loan mistakes to avoid as you finalize your student loans this summer and beyond.

Mistake 1: Borrowing more than you need

It may be tempting to overborrow but doing so can cost you in the long run. Since you’ll have to repay your loans with interest, borrowing more than you need can lead to high payments that might not fit into your budget. Your goal should be to only borrow what you truly need to cover tuition, fees, and living expenses. The less you have to pay back, the better.

Mistake 2: Ignoring lender differences

Not all private loan lenders are created equal. That’s why it’s a good idea to shop around and compare at least two or three lenders before you sign on the dotted line. As you explore your options and become familiar with how to get a private student loan, compare interest rates, repayment options, customer services, and fees. Fortunately, most lenders will let you prequalify online and check your loan offers for free, without any impact to your credit score.

Mistake 3: Overlooking your credit score

Unlike federal loans, private student loans are based on your credit (among other things). The higher your credit score, the lower rates you’ll likely land. Before you go ahead and apply for private student loans, figure out where you stand credit wise to reduce the risk of higher interest rates or loan denials.

Visit AnnualCreditReport.com to pull free copies of your credit reports from Experian, Equifax and Transunion. If you find any errors or inaccuracies, dispute them with the appropriate bureau. You can also use free credit monitoring services from your credit card company or online resources like Credit Karma to check your credit score. On-time payments can improve your credit and help you qualify for the best rates and terms.

Mistake 4: Missing financial aid deadlines

It’s important to exhaust all financial aid options before you turn to private student loans. To do so, consider deadlines for the Free Application for Federal Student Aid (FAFSA) as well as scholarships and grants. Otherwise, you may end up borrowing more than you actually need. Remember the earlier you get started on financial aid, the higher your chances of locking in the aid you desire.

Mistake 5: Not understanding loan terms

There’s no denying that loan terms can be confusing, especially if you’re new to borrowing. By taking the time to carefully read the fine print of a student loan agreement and making sure you understand interest rates, repayment periods, fees, and cosigner obligations, you can avoid unwanted financial surprises and make the most informed decisions for your unique situation.

Start your private loan application early

If you leverage our private student loan application tips and apply as soon as possible, you’ll find it easier to borrow smart. Plus, you’ll be able to make the most of your summer because you won’t be scrambling to secure the funding you need.

What are you waiting for? Use our free rate calculator to estimate your monthly payments and start planning for your educational expenses today, long before all the summer fun begins.

Ready to move forward with your private student loan? Earnest makes it easy to check your rate and apply online—with no fees or surprises. Start your application today so you can secure funding and focus on what really matters: getting ready for the school year.

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About the Author

Anna Baluch

Anna Baluch is a freelance finance writer from Cleveland, OH. She enjoys writing content that helps people from all walks of life make good financial decisions. Her areas of expertise include student loans, refinancing, mortgages, personal loans, budgeting, and debt management.