Private Education Loans, also known as Alternative Education Loans, help bridge the gap between what federal and institutional aid may cover and what a student needs financially to cover their educational expenses. Private loans are credit-based, school-certified student loans for undergraduate and graduate student borrowers enrolled at least half-time in an eligible program. In some circumstances, the loan is also available for less-than-half-time students. With private loans, qualified students may be eligible to borrow up to the full cost of their education, less other aid received.
When exploring loan options, you should consider Federal Direct student loans before considering a private loan. Federal student loans have lower and fixed interest rates, generous repayment plans, no prepayment penalties and no credit checks (except for PLUS Loans).
Compare the difference between Federal and Private Student Loans
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Although a private loan is a convenient source of additional funding for your education, it is important to budget and borrow carefully:
- Consider ways to keep your costs down in order to limit your total loan debt.
- Once you decide to borrow, borrow only what you need, because you must repay loans, with interest.
- Before you borrow, it is wise to estimate both the amount of debt you may be able to afford and the potential monthly loan payment you can expect after you graduate.
- Also, take very seriously the responsibility of borrowing and repaying an educational loan.
- Be sure to read and understand the terms and conditions on your promissory note. You are agreeing to repay the loan with all the accrued and capitalized interest and deducted fees.
- It is your responsibility to read and keep all your records and contact your lender regarding any changes in your status as a student.
- You are obligated to repay your loan regardless of whether you complete your education, are satisfied with your education, or are able to find a job.
- Private loans can be consolidated but not in combination with Federal loans. The two loan types must be consolidated separately.
How conscientiously you make payments on your student loan will affect your ability to borrow for a car, a house, or other purchases in the future. If you are late with your student loan payments, it will have a negative effect on your credit history. On the other hand, repaying your student loan on time can help you establish and maintain an excellent credit history.
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Baker College will process ANY private loan for which a student has been approved and has financial need up to the cost of attendance. Baker College will not choose a lender for you but can assist you in determining how much you can borrow. Students are encouraged to research additional lenders online by searching “private educational loans.” It is important that a student only apply for one private loan at a time.
Compare private student loan lenders on finaid.org.
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An applicant is required to complete a Private Loan Self Certification Form when applying for a private loan. This form is usually provided by the lender during the loan application process.
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