Private/Alternative Loan Guide

It is important to make an informed decision when considering funding your education through a private/alternative loan source. 

• A private/alternative loan should be your last option for funding.
  
• Complete only one application.
  
• Submitting multiple applications will affect your credit rating.
  
• Allow three weeks for processing.
  
• Be wary of fees attached by some lenders, which include
  origination, disbursements and repayment fees.

REMEMBER:
Borrow wisely!  A loan debt must be repaid so do not borrow more funds than you need.  Live like a student now and you will be better off after graduation!

For more detailed information about private/alternative loan borrowing click on the blue area below for further information:

Alternative Lender List 

• Definition of a Private/Alternative Loan
• Amount You May Borrow
• Who Is Eligible
• Repayment and Interest
• Checklist of Questions to Ask Lenders

Alternative Lenders
You may apply for a private/alternative loan with any lender, however we encourage you to borrower from the lender which processed your request for your Federal Stafford Loan.  If you have borrowed a private/alternative loan previously, we strongly encourage you to stay with the same lender as long as you are satisfied with the lender and their service.  Upon repayment, you may not consolidate private/alternative loans with Stafford loans, however remaining with the same lender will make the process of consolidating multiple private/alternative loans easier.

Definition of a Private/Alternative Loan
Private/alternative loans are designed to help finance students' education by filling in the gap between the financial assistance they receive from the school including federal loans and the estimated total cost of attendance.  

Amount You May Borrow
The actual amount you may borrow varies and depends on each individual student's circumstances.  Your financial aid includes federal loans, grants, institutional aid and private/alternative loans and may not exceed your budget, which you may view by logging on to our student web site, SimsWeb.

Who Is Eligible
Private/alternative loans are available to undergraduate, graduate and professional students who are enrolled in full-time, half-time, or less than half-time in a degree seeking program or non-degree seeking program at an approved school.

You must be a U.S. Citizen, permanent resident, or eligible non-citizen or apply with a cosigner who is.  Loan approval requires a credit check and is based on your credit score and your ability to repay.

Repayment and Interest
Most lenders will not require repayment of the private/alternative loans while in school, but, like the Unsubsidized Federal Stafford loan, interest will accrue during this period.

Checklist of Questions to Ask Lenders
When speaking to a lender, use this checklist of questions to make sure you understand all the terms of the loan and then do a comparison of lenders.  A chart, for your personal use, will help you compare is available here.

1. What types of loans do you offer and which one will work for me?
   
2. What is your eligibility criteria?  Find out if you must be enrolled at least half time and/or in a degree seeking program.
   
3. How much in total loan fees will I pay?  Find out if there is a fee at disbursement, additional fees at repayment, etc.
   
4. Will I need or should I use a cosigner?
   
5. What is my interest rate and how is it calculated?
   
6. How and when do you capitalize interest?  Accrued interest is periodically capitalized (added) to the principal balance of your loan.  The fewer times your lender capitalizes, the lower your costs will be.
   
7. Do I have a grace period after graduation?
   
8. What are my deferment options?
   
9. How long do I have to repay the loan?   If you are worried about high monthly payments after graduation, find a lender with a long repayment period (typical periods are 10, 15 or 20 years) and no penalty for early repayment.