Private Student Loans

Unlike Federal Student Loans, private student loans are specialized education loans based on your credit history and income and should only be considered after all federal student loans, grants and scholarships have been exhausted. Private student loans can be used for education-related expenses including tuition, books, transportation and room and board. Since many students do not have extensive credit history, they may need a creditworthy cosigner to increase the chances of getting the loan.

Private Student Loan Benefits

• Private student loans are not need-based, you can borrower up the full cost of attendance
• Flexibility - You may apply for a private student loan at any time
• Six-month grace period after graduation while you find a job

Private Student Loan Eligibility

• Must be enrolled at least half-time at an eligible school
• Must be a U.S. citizen or permanent resident or have a cosigner who is
• Many borrowers will need a cosigner. Borrowers without a cosigner must have at least 27 months of established credit history.
• Borrowers need to provide proof of enrollment, which includes one of the following: a tuition bill, award letter or recent transcript that is no more than 90 days old from the school the loan is for

Private Student Loan Repayment Options

You have three options including deferment or repayment of interest only or interest and principle.

Full Deferral: No principal or interest payments due while enrolled in school (up to four consecutive years). Payment of principal and interest will begin 6 months either after graduation or if no longer enrolled at least half time. Interest will continue to accrue during the deferment period and will be capitalized (added to the loan balance) at the time of repayment.

Interest Only: Pay only accrued interest while enrolled in school (up to four consecutive years). Payment of principal and interest will begin either 45 days after graduation or withdrawal from school.

Immediate Repayment: Payment of principal and interest will begin 45 days after loan is disbursed.

Disbursement of Private Student Loan Funds

Once you receive conditional approval, you will complete a promissory note and be required to submit documentation to verify the information on your application. If you return the requested documents quickly, you will receive your money soon afterward - it typically takes about 14 days but it can take as little as five business days after your conditional approval.

A check will be sent directly to you at your mailing address. Keep in mind, if you have a cosigner, the check will be made co-payable to both of you.

Additional Benefits of the Private Student Loan

• If you choose full deferment, payments do not have to start on the private student loan until six months after graduation or dropping below half-time status.
• You are not required to make payments while you are enrolled at least half-time in school
• Up to $2,500 in interest may be tax deductible - you should consult a tax advisor for details
• Some lenders provide a 0.25% interest rate deduction for setting up automatic payments from a bank account during repayment