Alternative student loans are available through banks or lending institutions to help students and parents bridge the gap between the cost of education and the amount of financial aid received.
- These are private, supplemental loans that are not guaranteed by the federal government.
- Terms and conditions can vary according to specific lender guidelines.
ELM Select is a free loan-comparison tool you can use to determine which lender might be best for you.
- This tool is available at Elm Select.
Regardless of your choice of lender, your Private Educational Loan application will be processed in a timely manner.
Before Applying for a Private Loan:
Please keep in mind that Cabrini encourages all students to apply first for federal and state financial aid.
Alternative loans may provide the resources for educational expenses not covered by received federal and state aid.
The actual amount a person can borrow varies according to each student’s individual financial circumstance.
Other variables include the cost of attendance, financial aid resources, and loan limits imposed by the lender.
When choosing a private education loan, students and families may want to consider the amount being borrowed, and take into consideration the interest rate, possible fees, deferment options, and repayment terms.
- Unlike federally guaranteed student loans, lending institutions that offer alternative student loans may impose certain requirements.
- In most cases, a student must have a good credit history, a low debt-to-income ratio, and a co-signer may be required.
- Because a credit check is likely, not everyone is approved for an alternative loan.
- Students and parents may apply for these loans through their own initiative. The Cabrini Financial Aid Office does not originate any applications or paperwork.
Because the lender must determine eligibility for the loan, students and parents must apply early to ensure that the loans will be approved by the time each semester’s bill is due.
Private Lender Requirements
As mandated by the Truth in Lending Act (TILA) and the Higher Education Opportunity Act (HEOA), private lenders must provide borrowers with a series of disclosure statements.
After you have been approved as a borrower for a private student loan, the lender must provide you with the following:
1.) Application and Solicitation Disclosure (ASD)
The ASD provides general information regarding interest rates, fees, and other terms that apply.
2.) Approval Disclosure (AD)
The AD contains specific information regarding the interest rates, fees, and other terms that apply to your loan.
The lender must give the borrower 30 calendar days to accept the terms of the private loan offer.
During this 30-day period, lenders are prohibited from changing the interest rate on the loan, expect those on the index of the loan (PRIME, LIBOR, T-Bill).
3.) Final Disclosure (FD)
The FD will be sent to the borrower only after the loan is accepted, all required documentation is received by the lender, and the school’s certification of eligibility for the loan has been received by the lender.
The FD will be sent at least three days prior to the first disbursement of the loan funds, and acknowledges the borrowers right to cancel the loan within three business days.
Please note that before a private loan can be disbursed the borrower must complete a self-certification form to the lender.
This form includes information about the availability of federal student aid, and the borrower’s cost of attendance. Lenders will provide this form during the application process.
It is recommended that you complete and submit the self-certification form provided to you by the loan lender.
If needed, the Financial Aid Office can provide you with a standard private loan self-certification form.