What are Alternative Loans?
Private (or alternative) education loans are credit based loans made through commercial banks and credit unions. Before borrowing a private education loan, it is important that you consider:
1. Discussing your financial aid options with the Financial Aid or Student Services Center. We will help determine if there are options other than borrowing available to you and be sure that if borrowing is unavoidable, that you maximize your federal student loans options first.
2. Researching all applicable loan fees associated with borrowing a private loan. Because these are commercial loans, there will be either up front fees, or fees added when loans are disbursed or when they enter repayment.
3. Understanding how your interest rate is calculated, when it begins to accrue, how often it is adjusted, whether there is an interest rate cap, how often the accrued interest is added to your loan principal, and how accruing interest will increase the total cost of borrowing.
4. Understanding the terms and conditions of your loan, the repayment timelines, and your repayment deferment options, if any.
5. Knowing the difference in your loan terms and costs if you use a co-signer. Most lenders offer better loan terms on loans secured with a co-signer.
6. Understanding that private education loans are considered an outside resource like outside scholarships. These loans must be considered as part of your financial aid package. The sum of your private loans (in combination with other financial aid awards) cannot exceed your total cost of attendance for the year.
How Much Can I Borrow?
Your private loan maximum is the difference between your current financial aid award and your cost of attendance, as determined by the PLU Financial Aid Office. When applying for a private loan, you will be borrowing loan funds for one academic year at a time.
How Do I Apply?
After you have determined that you will need to borrow an additional private loan, go to the application website of your selected lender and complete their on-line application. Your lender will collect the necessary application documents from you to make their loan decision. Once your application has been approved, your lender will notify the PLU Financial Aid Office. Please note that if you apply with a cosigner who possess a better credit record than yourself, you could improve the likelihood of loan approval and the terms (and cost) of your loan.
Pacific Lutheran University does NOT recommend specific private education loan providers, nor does the university have agreements with ANY lenders. You are free to borrow a private education loan from ANY lender. All private lenders complying with federal regulations must provide to you Federal Truth-in-Lending Disclosure Statements (which outlines your cost of borrowing their loan) when you apply, are approved and prior to the loan disbursement. They will also provide you with a Private Education Loan Applicant Self-Certification Form, which you must sign and return to them before they can process your loan.
Generally, your current education loan provider is a good place to start looking for a private loan lender, or a lender with whom you already have an account relationship. The following link to Fast Choice provides you with a tool to research and compare private loans from lenders who have made loans to PLU students in the past. Remember that your actual loan terms may be different and you are encouraged to read all of the disclosure information before borrowing.