Selecting An Alternative Loan Lender
Choosing a lender is an important decision, one that will affect
you for the life of your loan. We recommend you borrow from one of the lenders
listed. These lenders are committed to provide quality service to their borrowers
and they offer repayment incentives to help you manage your loan debt.
What is an alternative loan?
Alternative loans are available to students who are not eligible for financial
aid or who need additional funds to meet educational expenses. The student's
eligibility is determined by the cost of attendance minus other financial aid or the
annual loan maximum amount as determined by the lender.
Because alternative loans are not guaranteed by the federal government,
they must be insured privately. This extra cost is passed on to the borrower in the form
of higher fees and interest rates. In addition, the lender will look at your credit
history as well as other factors to determine if they will lend to you. You may be denied
by one lender and approved by another because of the different ways they interpret your
information.
Who needs an alternative loan?
Alternative loans are not for everyone. They are expensive and should only be borrowed
when all other resources (such as Stafford or PLUS loans) have been exhausted.
For example, a freshman dependent student can borrow up to $2,625 under the Stafford
Loan Program, and a graduate/professional student can borrow up to $18,500 annually,
although no more than $8,500 of that amount can be subsidized. Students who are not
eligible for grants or other aid and cannot work while they attend school may not have
enough funds to cover charges for registration fees, books, and housing. These students
may wish to consider alternative student loans.
What are the eligibility requirements for alternative loans?
Requirements vary according to the lender. However, some of the most common requirements are:
- Undergraduate or graduate student in a degree or certificate program Enrolled at least half time
- Creditworthy borrower or borrower with a creditworthy cosigner
- Student may be required to be a U.S. citizen, permanent
resident or eligible non-citizen
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What should you find out before deciding on an alternative loan?
- What is the interest rate and what is it based on?
- When does repayment begin?
- Can principal and interest be deferred?
- When is the interest capitalized?
- How much is the loan origination fee?
- What is the maximum amount I can borrow per year?
- What is the minimum amount I can borrow per year?
- Can payments be combined with Stafford payments?
- Can payments be made through electronic transfer?
- Can the loan be consolidated with other loans?
- Can I borrow money to cover past due balances from a previous school term?
- Are there interest rate deductions or other incentives for borrowers who make their
payments on time?
How do I apply?
Listed on this page are the names of a few lenders that offer an
alternative loan. You may also wish to contact your own bank to see
if they offer an alternative loan program.
The Financial Aid Office cannot recommend a lender for you. If you have any questions
about the loan, please contact the lender. Your Financial Aid counselor can assist
you in determining the correct amount to borrow.
You may apply online or applications can be obtained by calling the lender or from
the Financial Aid Office.
Be a smart consumer!
Always remember, these are loans of last resort. It is important to keep all borrowing
within reasonable bounds - never borrow more than you believe you will be able to
repay.
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