Student Financial Services takes great care in identifying a list of alternative loan lenders for students. It is our goal to identify only the best possible loan options. Our office participates in a yearly Request For Information (RFI) whereby we evaluate many lenders based on the terms and conditions of their loan products.
Please be aware that you are in no way required to utilize one of the lenders recommended by our office. Student Financial Services supports our students' right to use the lender of their choice.
Whether you are utilizing one of our recommended lenders, or choosing your own, we recommend you evaluate all lenders, and their Alternative Loans, using the following criteria.
Annual Percentage Rate (APR)
The APR is the annual cost of your loan, including interest, fees and other charges. If the rate is variable, as most private alternative loans are, the APR will change frequently during the life of the loan. The APR should not be the sole determining factor used in your loan choice. Carefully consider all of the loan terms when you choose to borrow.
For most loans students will enter repayment after graduation, though you should confirm the repayment provisions with your lender. If your education costs require that you borrow larger amounts, consider using a lender that offers longer repayment plans or options for repayment that will allow you flexibility. Ask your lender if you may pay the loan off early at your own discretion and if there are fees assessed for pre-payment.
It is important that you know if there are loan fees charged. If fees are added you should know when. If the fees are charged at the time of disbursement it may be deducted from the loan amount you receive. Alternatively, lenders may add the fees to the balance at the time of repayment.
It is important to know what your interest rate is. Also, you should know what is used as the base of the interest rate--Prime Rate or London Interbank Offer Rate (LIBOR)--and how each fluctuates.
Consider whether you have the option to pay or not to pay the interest while in school. You can save money if you opt to make interest payments while in school. Any unpaid interest may be capitalized (added to your principal balance). When is the interest capitalized? If the interest is capitalized quarterly or annually, it will cost you more than if it was only capitalized once at repayment.
Will the lender reward you by reducing the interest rate when you make a specified number of consecutive monthly payments on-time or when you sign up for automatic payments? Can you lose the incentive? Remember that offering repayment incentives does not mean that the loan has the most competitive terms. The lender may choose not to offer incentives and instead offer a lower interest and fee rate schedule to save you more money over time.