|
The University of Idaho is a Direct Lending School, which means we receive our funding directly from the federal government. However, situations arise when a student may need to borrow more than the allotted amount set by federal policy. Alternative loans are one source that students sometimes find helpful.
The University of Idaho does not recommend one loan program over another. Check with your local lender for options. Another option is to review the loans listed on http://www.finaid.com/loans/privatestudentloans.phtml . This is a private website not connected to the University of Idaho and therefore we cannot verify the data is correct.
What is an Alternative Loan?
Alternative loans (sometimes referred to as "Private Loans") are from a lending institution; they are not part of the federal government guaranteed loan programs. Alternative loans are more expensive than federal loans and should be used only when all other options have been exhausted. Additionally, an alternative loan may not be consolidated with federally guaranteed student loans. It is important for you to check federal loan programs and research all possibilities for grants, scholarships, and Work-Study before you borrow from an alternative loan program. If you need an alternative loan, use the comparison charts in the above links and research the lenders for additional information. Choose the loan that best meets your needs and remember - borrow only what you need!
Requirements for Loan Certification
The University of Idaho requires that the following conditions be met prior to private loan certification:
- Students must be enrolled in a degree seeking program
- Students must be enrolled at least half time
- Students must be making Satisfactory Academic Progress
Give yourself credit!
Lenders use credit scores to make fast credit decisions on which applicants are likely to repay their loans on time. Credit scoring is calculated using many pieces of your past bill history. The way you managed credit in the past is often a good indication of how you will manage credit in the future. Therefore, your credit score is like a snapshot of your level of credit risk at a particular time. So, give yourself the credit you deserve. Pay your bills on time and avoid applying for too many credit accounts. You may obtain a copy of your credit report by contacting any or all of the three major credit reporting agencies.
Equifax 800-525-6285
Experian 888-397-3742
Trans Union 800-680-7289
Retain your records!
You are responsible for retaining your own set of records for future needs. It may be necessary to retrieve your application, promissory note, or other information. Make photocopies or keep electronic records of all transactions.
What should I look for in an alternative loan?
Annual Percentage Rate (APR)
The APR is the annual cost of your loan; it includes interest and the effect of any fees and charges. APRs will differ depending on the terms and amounts of your loan. If the rate is variable, the APR may change during the life of the loan. Carefully consider the terms and APRs when you borrow an alternative loan.
Fees
Does the lender charge any type of fees? Some lenders charge no fees at all, some at the time they disburse or at repayment or both.
Loan Limits
Is there a maximum amount you can borrow? Does the loan have an annual or aggregate limit? Will these limits meet your needs?
Co-signer Release
Does the loan require you to have a co-signer? Does the lender offer a co-signer release option after you make a required number of on time payments?
Interest Capitalization
What happens if you choose not to pay interest while you are in school? When is the interest added? Annually? At repayment? If the interest is capitalized annually, the loan is more expensive than if the loan is capitalized once at repayment.
Servicers
Does your lender sell their loans? Some lenders sell their loans to a third party servicer; others retain ownership throughout the life of the loan. Ideally, you want a lender that services its own loans. If your loan is sold, all future correspondence should be sent to the new owner of your loan. |