Before applying for a private loan, students should always exhaust all of their federal loan eligibility. Parents may also want to consider using federal parent loan funds before cosigning a private loan for a student.
The Office of Student Financial Services encourages students and families using private loans to apply for one full academic year at a time rather than on a per-semester basis. This prevents multiple hits on the borrower’s credit report and ensures that a student has a way to cover their costs for a full academic year. If you need assistance planning or have questions, please do not hesitate to contact us.
We recommend that students apply for a private loan with a co-signer. A co-signer assumes responsibility for a loan should the borrower fail to repay. Having a co-signer on the loan often results in a lower interest rate and reduced fees. Please see our information on the Qualities of a Good Cosigner to help you choose a co-signer prior to applying for a loan.
The following are some questions that you may want to ask your lender or consider when choosing a lender/loan option:
- Do you charge any fees for disbursement, repayment, deferments?
- Are the fees deducted from the loan disbursements or added to the total loan amount?
- Are in school payments required?
- What is the interest rate?
- Is the interest rate variable or fixed?
- When is interest capitalized?
- Do you offer flexible repayment options?
- Can I request a deferment or forbearance after I leave school and enter repayment?
- Do you offer interest rate reductions for auto-debit payments?
- How much experience do your customer service representatives have?
- Can I talk to a person, not an automated system? How long is the wait time typically?
- Can I email an account representative if needed?
- How long have you been lending loans?
- Do you have a history of selling loans?
- What are my options for loan consolidation?