School Loans

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School Loans
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This is an example of school loans. This document is useful for studying school loans.

Shared by: Crisologa Lapuz
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posted:
9/4/2008
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PRIVATE ALTERNATIVE LOAN INFORMATION



What is a Private Alternative Loan?



A Private Alternative Student Loan is a loan that a student can take should he/she need

financial assistance for school beyond what is available from federal aid. These loans

are intended to be a supplement to federal, state, and institutional aid awarded as a

result of the completion of a FAFSA.



When should I apply for a Private Alternative Loan?



You are first encouraged to complete the FAFSA and utilize those funding sources prior

to obtaining an alternative student loan. If this funding is insufficient, you may then

want to explore Private Alternative Loan options.



Who is eligible?



Any student is eligible to apply; this includes undergraduate, graduate, and credential

students. The private lender will determine the student’s eligibility based on credit

history. The school will certify the loan for student’s loan based upon his/her Cost of

Attendance for the loan period. Students should know that Private Alternative Loans

are certified for the school year; loans are not based on the calendar year.



Check with your lender or the school for additional eligibility requirements.



How do I apply?



Should you decide to borrow an alternative loan, we encourage you to research and

become familiar with the loan options including interest rates, terms and conditions,

and other specifics pertaining to the loan.



Most commercial lenders participate in Private Alternative Loan programs. You may

wish to contact your current bank or financial institution where you or your parents

maintain a checking or saving account to inquire if the lender participates in the

Alternative Loan programs. Many lenders allow borrowers to apply online through their

websites. Once the loan is approved by the lender, the application will be sent to the

school for certification.



When are Private Alternative Loan funds disbursed?



These funds are disbursed at the beginning of each term or, if certified after the term

begins, after the loan process has been completed. The check is sent to the school and

you will be notified when it is available for pick-up.

What questions should I ask my lender?



In making a decision on a Private Alternative Loan, it is important that you research and

understand all of the borrower benefits, loan fees, repayment options, etc. Below is a

list of questions that may assist you in determining which loan will best suit your

educational borrowing needs.



 What is the interest rate?

 Is the interest rate fixed or variable?

 When does the variable rate change?

 Is there a cap on interest?

 What fees are charged?

 When and how do I pay the fees?

 What is the total cost of the loan?

 When does repayment begin?

 Is there a grace period?

 Can payments be deferred?

 Do I have to pay the loan while in school?

 Are there any borrower benefits? How do I qualify for these benefits?

 Are there minimum enrollment requirements?

 Are there satisfactory academic progress requirements?

 What are the credit criteria for approval?

 Do I need a co-signer?


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