Bridge the gap between the cost of your education and the financial assistance you receive
Alternative loans, also known as private education loans, are offered by private lenders and are not federally funded. These loans may not be included in a federal consolidation.
- Eligibility for private education loans depends on your credit score.
- They usually have variable interest rates based on Prime or LIBOR and rely on a credit review to calculate the initial rate of interest.
- Typically the student is the borrower and often a co-borrower is required to have a good credit score to receive a favorable interest rate.
- Interest accrues after disbursement of the loan.
It is recommended that you exhaust your eligibility for federal student loans before resorting to private student loans. Alternative loans tend to cost more than the education loans offered by the federal government. Federal educational loans offer fixed interest rates that are often lower than the variable rates offered by most private educational loans. Federal educational loans also tend to offer better repayment and forgiveness options.