Where to find financing for small college expenses.
Can I get federal student loans to borrow $5,000?
Yes, you can get a federal student loan to borrow $5,000. While the popular Direct Subsidized and Unsubsidized Loan programs come with annual limits, nearly all student borrowers can borrow more than $5,000 per year.
The only case where you wouldn’t be able to borrow $5,000 is if you already reached your aggregate lifetime student loan limit for your degree type.
- Undergraduate lifetime limit: $31,000 for dependents and $57,500 for independent students
- Graduate lifetime limit: $138,500
With interest rates starting at 5.05% for undergraduates and 6.6% for graduate students, these loans are some of the more affordable options out there.
What about PLUS Loans?
Parent and Graduate PLUS Loans have no annual or lifetime limits beyond your school-certified cost of attendance. But you need to pass a credit check or bring on a creditworthy endorser. And with interest rates fixed at 7.6%, private lenders might offer a better deal.
Private student loan providers that offer $5,000
|Provider||Minimum annual amount||Rates||Eligibility||CTA|
|CommonBond||$5,000||3.2%–7.25%||You must be an American citizen or a permanent resident of the US and have good to excellent credit or a creditworthy cosigner. Education requirements: You must be enrolled at or graduated from an approved Title IV undergraduate, graduate or MBA program|
|Credible||$1,000||4.2%||Enrolled at least half time in qualifying US educational program, ages 18+ or apply with cosigner|
|LendingTree||Varies by lender||3%||Eligible expenses from accredited school, US citizen, good to excellent credit or creditworthy cosigner|
|U-fi||$1,000||5.25%||US citizen, permanent resident or international student 16 years or older enrolled at least half time in a bachelor’s, associate’s or graduate program at an eligible school; must pass a credit check and make satisfactory academic progress as defined by your school
|Ascent||$2,000||4.23%–13.23%||$24,000+ annual income, strong credit, enrolled in eligible school at least half time, US citizen or permanent resident||Read review|
If federal student loans are off the table, most private student loan providers offer $5,000 student loans. However, some have higher minimum loan amounts of $7,000 or even $10,000.
And like federal student loans, private lenders typically have lifetime limits, though this limit is usually higher than the federal loan limit.
How to pay off $5,000 in student debt
Got $5,000 in student loan debt? There are several options to pay it off faster:
- Apply for a loan repayment assistance program (LRAP). LRAPS are federal and local programs that provide partial student loan forgiveness by profession — especially healthcare, education, law and the military. You can typically get over $5,000 in student loan debt forgiven through an LRAP.
- Use your tax refund. Make an extra repayment or two toward your student loan with your tax refund each year. Be sure to specify that you’d like the repayment to go toward the loan principal before paying off interest or fees.
- Refinance for a shorter loan term. Federal loan terms start at 10 years, but many private student loan refinancing providers offer loan terms as short as five or seven years.
How your loan term affects repayments
How long you take to pay off your loan has a significant impact on both the upfront and total cost. The longer you take to pay back a loan, the less expensive it’ll be in the short term but the more you’ll pay in interest overall.
Let’s take a look at an example. Say you had a $5,000 student loan at a 5.8% interest rate — the national average. Here’s what you’d pay per month and in total interest for different loan terms:
|Loan term||Monthly repayment||Total interest paid|
As this example shows, lengthening your loan term can cut your monthly repayment down by nearly a third. But it more than quadruples how much you pay in interest in the long run.
With a loan amount as small as $5,000, the slight difference in monthly repayments might not be worth the extra $2,687 you’d pay in interest.
Federal Direct Subsidized and Unsubsidized Loans should be your first stop when you need $5,000 in student loans — they’re the least expensive options and you don’t need a cosigner to qualify.
Many private lenders offer loans starting at $5,000 or higher, so check that your loan amount is available before you apply. You can learn more about how it all works by checking out our guide to student loans.