What you need to know
Terms and conditions for alternative (private) loans may be less favorable than those of federal student loans. We recommend that you use all eligibility for federal aid and fully explore the loan terms and options for repayment before applying for an alternative loan. Be sure to fill out your FAFSA, (the Free Application for Federal Student Aid). Borrow only what you need to avoid excessive debt that may affect your future plans.
The estimated payment worksheet can help you calculate what you will owe.
Consider reviewing SPU’s payment plans to determine if they may be an alternative to borrowing.
Research your options
Students may borrow alternative loans up to the cost of attendance, less financial aid, subject to lender loan limits.
Comparing information about eligibility, repayment, and other terms and conditions for loans offered by different lenders will help you make an informed decision. Find this information on the lender’s website or by speaking with the lender(s).
Research your options with FASTChoice. The list of lenders displayed in FASTChoice is not an exhaustive list. You can find other lenders outside of FASTChoice.
Not sure what to ask your lender? Here's help.
- Are there enrollment requirements? (i.e., Is the loan available for less than half-time or non-matriculated students?)
- Is satisfactory academic progress required?
- What requirements must be met to use the loan for past-due balances?
- Are there any fees? If so, what are they and when are they charged?
- Does the lender offer benefits for on-time payments or auto-debit payments?
- How long will you have to repay the loan?
- Are there any prepayment penalties?
- Are there any options to postpone or reduce payments?
- What is the highest and lowest interest rate for the loan?
- Is there a maximum amount of interest that may be charged?
- Is the interest rate fixed or variable?
- If variable, how frequently do variable interest rates change?
- How often is interest capitalized (i.e., added to the principal)?
- Who will service the loan?
Sometimes you can get a better interest rate by having a cosigner, even if you don't need one. Also ask:
- Is a co-signer required?
- If a co-signer is used, will the credit of the borrower or the co-signer be used to establish the terms of the loan?
- What are the requirements for releasing a co-signer?
SPU utilizes ELM for efficient alternative loan processing and ELM/NDN for delivery of disbursements. If you select a lender that does not utilize ELM/NDN, additional time may be required for processing and receipt of disbursements.
Helpful terms when choosing alternative private loans
Private student loans have two types of interest rates: fixed and variable.
- APR: APR stands for “annual percentage rate.” Your APR is expressed as a percentage representing the yearly cost of borrowing money, including fees or additional transaction costs. As a student loan borrow, know a loan's APR is useful as a tool to compare the terms of two loans. For instance, if one lender offered an APR of 5.7% while another promoted an 8.9% APR, you'd know that a loan from the second lender would cost more in the long term.
- SOFR: SOFR stands for "Secured Overnight Financing Rate.” The SOFR Index is another benchmark interest rate that banks use to price USD-based investments and loans. Fixed rates will stay the same over the lifetime of the loan, whereas variable rates will start low and increase over time. It is not uncommon for lenders to advertise a lower rate for the in-school and grace period, with a higher rate in effect when the loan enters repayment. Interest rates vary based on the economic climate.
- Fixed Rate Private Loans: works similar to federal loans. Because a fixed rate is locked, existing fixed-rate private loans will not change as the red rate rises or falls
- Variable Rate Private Loans: have interest rates that can change periodically. These rates are typically based on the secured overnight financing rate, or SOFR, an average of interest rates that institutions use for overnight transactions where Treasure bonds are held as collateral.
Loan and debt/salary calculators
A loan calculator may be helpful to estimate your monthly payment. To determine how much can be borrowed, use a debt/salary calculator.
Find more loan resources to consider as you make your financial aid decisions.
Alternative (private) loans
Alternative (private) loans are credit-based consumer loans offered by a lending institution, so a better credit rating secures a better interest rate. If you request additional funds later in the year, a second application may be required and the lender may need to pull your credit report again.
A Self-Certification form is required to receive an alternative loan, and a borrower must complete and submit this form to the lender.
- Get this form from your lender or here as a PDF from Student Financial Services.
- Bring or email this form to loans@spu.edu for completion of section 2 of the form.
The form will be returned to you via email to print, sign, and submit to your lender.
Note that regulations require the lender and borrower to complete several steps before the loan may be disbursed, and once approved, it may take an additional 30 days before SPU receives the funds.