Alternative Loans by jolinmilioncherie


									A I D                    Alternative Loans
                           lternative loans are available to students                    Loans to Consider
                    A      who are not eligible for federal loans or who need
                           assistance beyond their federal loan eligibility. These
                    loans are made privately through banks and other financial
                                                                                         Alternative student loans should only be considered after first
                                                                                         applying for federal student aid, using the Free Application for
                                                                                         Federal Student Aid (FAFSA). Note that alternative student
                    institutions and are subject to their terms.                         loans require a credit check. Students should contact the
                        Although these loans are obtained through private                lender directly, and allow four to eight weeks for the autho-
                    lenders, they must be certified by the school and within the         rization process—plan accordingly. Terms and conditions are

                    student’s cost of attendance (budget).                               subject to change. Contact the lender for the most current in-
                        Alternative student loans should only be considered after        formation.
                    an honest and careful review of your budget and debt.                    The lenders listed on the next page offer advantageous
                    Especially because this debt is in addition to your federal          rates to CU-Boulder students. Other lenders are available. If
                    loan debt, it is in your best interest to borrow the least           the listed financial institutions are unable to meet your
                    amount possible. Alternative student loans differ from               needs, or if you simply want to review other options, see a fi-
                    federal student loans in several ways.                               nancial aid counselor.
                    1. There is no cap on interest rates. If interest rates in
                       general increase during the in-school, grace, or
                       repayment period, your alternative loan interest rate will
                       also increase.                                                    Annual percentage rate (APR)—The relative cost of
                                                                                           financing the loan (including fees and interest) on a
                    2. The lender will check on your credit and perhaps deny
                                                                                           yearly basis reflected as a percentage rate. The lower the
                       the loan or require that you have a co-signer with good
                                                                                           APR, the lower the true cost of credit.
                                                                                         Capitalization—Occurs when accrued interest is added to a
                    3. Alternative loans cannot be consolidated with federal loans,
                                                                                           loan’s principal balance. Lenders may capitalize interest
                       so you will have an extra payment to make each month in
                                                                                           quarterly, annually, or once at repayment. The loan
                       addition to the payment on one of more federal loans. With
                                                                                           becomes more expensive when interest is capitalized
                       some lenders, single-payment arrangements can be made.
                                                                                           more frequently.

                        Before borrowing any loan, estimate the monthly payment
                                                                                         Fees—Be aware of all fees and how they add to the total
                    amount and total cost of borrowing, remembering that both
                                                                                           cost of the loan. There are different types of fees. Fees
                    will change as interest rates in general change.
                                                                                           may have a greater impact than interest rates on the total
                                                                                           cost of a loan.
                    Choosing an Alternative Loan                                            Loans may have a combination of fees:

                    Three factors will likely affect your choice of an alternative       • Origination fee—a flat percentage taken out of the loan,
                    loan lender:                                                           usually up front. The amount is subtracted from the loan
                    1. Costs—consisting of the interest rate and loan fees. Loans          check. It can be considered a fee to administer the loan.
                       with lower fees often have higher interest rates, just as loans   • Repayment fee—a percentage of the loan added to the
                       with lower interest rates often have higher fees.                   principal amount when repayment begins.
                    2. Service—talk with prospective lenders. Ask specific               • Guarantee fee—a percentage of the loan added to the prin-
                       questions and expect good answers. Whether you are in               cipal as default insurance. It is typically 1 percent and by
                       school, in your grace period, and in repayment, you                 law cannot exceed 3 percent.
                       should expect prompt, attentive, knowledgeable service
                       from your lender.                                                 Interest rate—A percentage of the loan that the bank
                    3. Repayment alternatives—some lenders have more                       charges you to use its money.
                       flexible options than others, or at least an option that          Prime rate—The prime rate is the interest rate charged by
                       better fits your ability to repay. Remember that the                banks to their most credit-worthy customers (usually the
                       longer you take to repay, the greater your total cost of            most prominent and stable business customers).
                       borrowing will be.                                                LIBOR (London Interbank Offered Rate) rate—Rate of
                                                                                           interest that major international banks in London charge
                                                                                           each other for borrowing.
                                                                                                                                                            A I D
Bank                       Enrollment          Interest Rate      Fees               Repayment          Other

Citibank                   Undergraduate       Prime + 0%.        None.              Twelve years;      • $18,000 annual income needed to apply
(CitiAssist)               or graduate.                                              six-month            without cosigner.
800-745-5473               Enrolled in at                                            grace period.      • Cosigner release option.        least one class.                                                             • Loan can include university bill balance
                                                                                                          from up to one year prior.
                                                                                                        • Foreign students with a U.S. citizen cosigner.
                                                                                                        • Study abroad okay.

                                                                                                                                                            F I N A N C I A L
                                                                                                        • Graduate school and business college
                                                                                                          loans available.
                                                                                                        • No Reasonable Academic Progress policy.

Wells Fargo                Undergraduate       Prime + 0% to None.                   Twelve years;      • Reasonable Academic Progress.
Collegiate Loan            or graduate in      prime + 6%,                           six-month          • Creditworthy or with creditworthy cosigner.
800-658-3567               eligible program,   based on the                          grace period.      • U.S. citizen or national or permanent resident.         enrolled at least   credit of the                                            • Creditworthy cosigner required for permanent
                           half time.          borrower and/or                                            resident.
                                               cosigner.                                                • Cosigner release option.
                                                                                                        • $80,000 aggregate limit.
Current prime rates can be found at

For More Information                                    U.S. Dept. of Education
Office of Financial Aid                                 800-433-3243 General Info/FAFSA
                                                        800-730-8913 TTY/TDD
The financial aid office is in Regent 175.              800-848-0979 Direct Loan Servicer
    9:00 a.m.-5:00 p.m. (fall/spring)                   800-557-7392 Direct Loan Consolidation-
    9:00 a.m.-4:30 p.m. (summer)                        FAFSA:
Internet:                                               National Student Loan Data System:

                                                                                                                                                            O F
Home Page:
303-492-5091 Office of Financial Aid
303-492-7349 Student Employment
303-492-4533 Scholarships

                                                                                                                                                            O F F I C E
303-492-0838 FAX
                                                        The University of Colorado does not
Write:                                                  discriminate on the basis of race, color,
University of Colorado at Boulder                       national origin, sex, age, disability, creed,
Office of Financial Aid                                 religion, sexual orientation, or veteran
556 UCB                                                 status in admission to, and treatment and
Boulder, CO 80309-0556                                  employment in, its educational programs
Title IV Institution Code: 001370                       and activities.


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