Alternative Private Loans

• 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?

• 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.

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.