Private Student Loans
Private Education Loans, often referred to as Alternative Education Loans, are designed to fill the financial gap between federal and institutional aid and the total cost of education. These loans are credit-based and are certified by the school for undergraduate and graduate students who are enrolled at least half-time in an eligible program. In some cases, loans may also be available for students enrolled less-than-half-time. Qualified borrowers can typically access funds up to the full cost of their education, minus any other aid received.
Consider Federal Loans First
Before opting for a private loan, it's essential to explore Federal Direct student loans. Federal loans generally offer lower, fixed interest rates, flexible repayment options, no prepayment penalties, and do not require credit checks (with the exception of PLUS Loans).
Compare the difference between Federal and Private Student Loans
Borrowing Wisely
While private loans can provide valuable additional funding for your education, it's crucial to approach borrowing with caution:
- Minimize Costs: Look for ways to reduce your educational expenses to limit your total loan debt.
- Borrow Responsibly: Only borrow what you truly need, as loans must be repaid with interest.
- Estimate Repayment: Before borrowing, assess how much debt you can reasonably manage and what your monthly payments might look like post-graduation.
- Understand Your Responsibility: Be aware of the commitment involved in borrowing and repaying an educational loan.
- Read Your Promissory Note: Ensure you fully understand the terms and conditions, including repayment obligations and accrued interest.
- Maintain Records: Keep track of your loan documents and communicate with your lender if your student status changes.
- Repayment Obligation: Remember, you are required to repay your loan regardless of your educational completion, satisfaction, or employment status.
- Loan Consolidation: Private loans can be consolidated, but they cannot be combined with federal loans; they must be consolidated separately.
Your payment history on student loans can impact your future borrowing capabilities, such as for a car or home loan. Late payments can harm your credit score, while timely payments can help you build a positive credit history.
Choosing a Private Loan Lender
Baker College is committed to helping you make informed decisions about financing your education. While we don't endorse a preferred lender list, we will process any approved private loan for students demonstrating financial need, up to the cost of attendance. Our Financial Aid Advisors are here to assist you; they can help determine your private loan eligibility and the appropriate amount to consider borrowing based on your individual student aid package.
To empower your search for the right private loan, we provide access to a Private Loan Lender Comparison Tool. This tool showcases lenders that our students have successfully utilized in the past year, selected based on their lending history to our student body and the quality of their products and services. We encourage you to use this tool as a valuable starting point to compare rates, terms, and features across various lenders, allowing you to find the best fit for your individual needs. Students are also encouraged to research additional lenders online at finaid.org.
Private Loan Self Certification Form
When applying for a private loan, applicants must complete a Private Loan Self Certification Form, typically provided by the lender during the loan application process.