Private Alternative Loans


Private Alternative Loans can help you pay college expenses that may not be covered by federal loan programs or other financial aid.  Private loans typically carry higher interest rates and fees than federal loans.  The student is the borrower, and most often, will need a credit worthy co-signer.  The student has the choice of repaying the loan while in school, paying interest only, or deferring payments until they are out of school (interest accrues).  Alternative loans are not for everyone.  They can be expensive and should be borrowed wisely.

 

Before considering a private loan, be sure that you haveexhausted all possible federal student loans.  Federal student loans generally have more favorable terms and conditions than private loans.  We recommend that you borrow through the Federal Direct Stafford Loan Program before turning to private loans.

 

Application Process

Many lenders provide online applications for your convenience.  We recommend that you apply for private loans using the lender’s online application.  The Financial Aid Office will receive electronic certification rosters from the lenders and can process these applications much faster.  Any previous awarded aid that has not been declined will reduce your eligibility for a private alternative loan.  If you do not plan to use certain aid programs, such as the Federal Work Study Program, please decline it before applying for a private alternative loan.

 

Private Lenders

Once you have selected your lender:

Your lender should provide you with a copy of the required Private Education Loan Self-Certification Form.  (You will need to contact your lender for a copy of the Self-Certification Form)

To complete your Self-Certification Form, you will need to know your cost of attendance and estimated financial aid.  If you receive financial aid, you can access your information on your My ISU portal account.  Access My Award Information   Award by Aid Year Aid Overview.

If you are not receiving financial aid, you can use the Cost of Attendance figures provided from the Office of Student Financial Aid website.

 

Loan Amounts

The maximum amount that a student may borrow cannot exceed the cost of attendance minus any other aid.  You are encouraged to borrow only the amount necessary to cover that portion of your educational expenses that cannot be covered by other means.

 

Interest Rates and Fees

Alternative Loans have a variable interest rate, based on either the Prime Interest Rate or LIBOR.  Your own and/or co-borrower’s credit score will determine your interest rate.  Be aware that the advertised interest rate may be introductory or limited to highly qualified borrowers.  The rate that you are offered may be considerably higher depending on your creditworthiness.

Many private alternative loans involve fees.  These fees are usually presented as a percentage of the requested loan amount.  Fees are usually added to the amount you requested to borrow.  You should consult your lender to determine the type of fee associated with your loan.

 

Loan Periods

The application process will request that you specify a loan period for your private loan.  It is important that you are aware of the start dates for your college.  Failure to provide an accurate loan period on your loan application can result in a delay in processing your application.

 

Loan Period for the 2011-2012 Year
Academic Year 08/24/2011-05/04/2012
Fall 08/24/2011-12/16/2011
Spring 01/09/2012-05/04/2012
Summer 05/14/2012-08/11/2012




Disbursement of Funds

The procedures for disbursement of your private alternative loan funds may vary from lender to lender.  Once funds are disbursed to Indiana State University, your account will be credited with the loan funds.  For academic year loans, the first disbursement will be paid at the beginning of the fall semester and the second disbursement at the beginning of the spring term.  For semester loans, the disbursement will be paid at the beginning of the semester.

 

Links to Private Alternative Loan

Below are the links to the lenders who have provided loans to ISU students in the past three years.  We recommend you review the terms and conditions of multiple lenders before you apply.  Choosing your lender is strictly your decision.