Alternative Student Loan Programs

Alternative student loan programs, also called supplemental or private loans, are loans that are funded by banks or other private lenders, and are not part of the government's student loan programs. Alternative loans are an option you should look into only after you've applied for all other financial aid for which you may be eligible, including:

Every alternative student loan program has different terms, so be sure to research the options available to you so that you can make an informed decision. In most cases, alternative loan programs:

Require that you have good credit and/or have a cosigner with good credit to take responsibility for repaying the loan if you do not.
Require that you attend college at least half-time.
Have a variable interest rate that may change quarterly. The rate may have a high cap or no cap and may depend on your credit rating.
Charge fees that may be based on your credit and/or charged upon origination, disbursement, or repayment.
Allow 15-25 years repayment, probably beginning after you graduate, withdraw, or drop to less than half-time attendance.
May or may not provide you a grace period after you graduate, withdraw, or drop to less than half-time attendance before you begin repaying.
May or may not offer any deferment or forbearance options, which allow you to delay your student loan payments.
May not be consolidated or combined with any federal student loans.

For more information on alternative loans, contact the financial aid office at your college.

View the Federal Trade Commission's Student Loans: Avoiding Deceptive Offers.

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