Student loan options to borrow $5,000

Only need $5,000 to cover your annual cost of school? You’re in luck. Most options are open to you — though you could have trouble qualifying with a handful of private lenders. With a loan of that size, you might want to go for the shortest loan term available to save on interest and get out of debt as fast as possible.

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 dependentsmore info button and $57,500 for independent students
• Graduate lifetime limit: $138,500more info button

With interest rates starting at 5.5% for undergraduates and 7.05% 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 5.3% , private lenders might offer a better deal.

Private student loan providers that offer $5,000

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:

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.

Bottom line

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.

Frequently asked questions

• Can I get a $5,000 student loan with no cosigner?

  You can. Federal Direct Subsidized and Unsubsidized Loans don’t require a cosigner. And some private lenders like Mpower and Sixup offer student loans specifically for borrowers without a cosigner, considering your GPA and standardized test scores instead.

  Not a resident? Check out our guide to international student loans to learn about your options.

• How many years does it take to pay off a $5,000 student loan?

  That depends on your loan term and the type of student loan you have. The minimum loan term for federal loans is 10 years, though there’s no penalty for paying it off early. Many private lenders offer terms starting at five years, though typically there’s no penalty for paying it off early either.

• How much is the tax deduction for interest paid on a $5,000 student loan?

  You can deduct up to the full amount of interest you pay on your $5,000 student loan, which varies depending on your APR and loan term. The maximum you can deduct in student loan interest repayments is $2,500 per year, though you likely pay less in interest on a loan that small. Learn more with our guide to calculating your student loan interest deduction.

Written by

Anna Serio

Anna Serio was a lead editor at Finder, specializing in consumer and business financing. A trusted lending expert and former certified commercial loan officer, Anna's written and edited more than 1,000 articles on Finder to help Americans strengthen their financial literacy. Her expertise and analysis on personal, student, business and car loans has been featured in publications like Business Insider, CNBC and Nasdaq, and has appeared on NBC and KADN. Anna holds an MA in Middle Eastern studies from the American University of Beirut and a BA in Creative Writing from Macaulay Honors College at Hunter College, CUNY. See full profile

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