Private Education Loan Information
If you have educational expenses that can't be met through other sources of financial aid such as scholarships, grants, or federal educational loans, a private education loan, sometimes called "alternative loan", may be an option. A private education loan is a consumer loan offered by banks, lending companies, and other private entities to an individual for the purpose of paying college expenses. Before applying for a private loan, make sure you take advantage of any free money available to you, such as scholarships or grants, and federally guaranteed student loans which provide a lower cost financing solution.
Graceland University does not recommend or endorse any private loan lender. Web searches for private education loans typically provide multiple loan options. You must select your private loan lender; the financial aid office cannot do it for you.
The entire private alternative loan process can take up to six weeks--two weeks for the student to obtain and complete the application, two weeks for the school to certify the application, and two weeks for the lender to send the loan funds to the University and for the University to process the funds.
Items to consider when selecting a private (alternative) education loan
- What are the requirements for borrower eligibility including the underwriting criteria for the loan?
- What are the qualifications for a student borrower to receive a loan without a co-signer?
- What are the terms for repayment? Look for a calculator or a chart that estimates monthly payment.
- Are there any loan deferment or forbearance options?
- Is there interest deferment, such as while attending school?
- What fees are there and how are the charged: upfront, reduction of disbursement, added at repayment?
- What are the minimum and maximum loan repayment amounts? What is the aggregate maximum for the loan?
- Are there any borrower benefits?
- How are borrower benefits earned?
- What percentage of borrowers actually earns the benefits?
- How is the interest rate determined?
- How often is accrued interest capitalized to the loan?
Fixed or variable rate? For variable rates:
- What was the annual percentage rate (APR) for the prior calendar year?
- Is the current rate expected to be similar to prior year?
- Does the interest rate include a floor or ceiling? What are they?
- Are there provisions to release the co-signer?
- Are private loan consolidations available by the lender?
- How much is the origination fee on the loan?
You should carefully evaluate a private education loan product before accepting any loan proceeds. That includes reading, and absorbing, the terms of the private education loan promissory note and all disclosures that the private education loan provider sends to you.