"Alternative Student Loans"
Alternative Student Loans Alternative student loans provide students with a way to cover any remaining balance on an account that is not covered by federal, state or institutional aid. In addition, many students use these loans to assist in financing school related travel or living expenses. The interest rate for these loans vary depending on the lending institution and the borrower's credit rating. One of the biggest benefits to these loans is that, unlike parent loans, no principle payments are required while the student is in school. Southwestern College does not assume a student wants alternative loans to assist in paying for tuition. These loans are completely initiated by the student borrower directly with the lending institution. Once the loan has been started, the Office of Financial Aid will supply the lender with the information they need to get the money to the right place. Instructions for Setting Up an Alternative Student Loan STEP 1 Choose Your Lender STEP 2 Receive Credit Approval STEP 3 Complete Master Promissory Note STEP 4 Receive Your Funds STEP 1: Choose Your Lender There are several lenders that offer alternative student loans. You have the right to choose any lender that offers an alternative loan product. You may also choose from Southwestern College's Preferred Lender List. The following lender institutions have been chosen for their service, borrower benefits and compatibility with Southwestern's loan processing systems. STEP 2: Receive Credit Approval Alternative student loans are not guaranteed by the Federal government. Consequently, before a student can be approved for a loan, they must pass a credit approval. To verify your credit history, the lender involved will perform a credit history check. Please remember that frequent credit history checks adversely effect credit scores. It is therefore recommended that students applying for an alternative loan do so at only one lending institution. Most students will not be able to qualify for an alternative student loan on their own. In these cases, it is suggested that the student apply with a credit-worthy co-signer. This co-signer does not need to be related to the student, but must be a United States citizen. The co-signer will be submitted to the same credit history check as the student. The majority of alternative loan approval applications are online. Most lenders can tell you within 5 minutes whether or not you and your cosigner are approved for a loan. STEP 3: Complete Master Promissory Note (MPN) Once you have chosen a lender and received your credit approval, the lender will either point you to an online promissory note or send you a printed one in the mail to sign. In addition to the promissory note, they may also ask you for proof of your, or your co-signer's income (W-2 statement, copy of paycheck, etc.) Meanwhile, the lending institution will also contact Southwestern College to certify that you are eligible for the loan amount that you have requested. The Office of Financial Aid recommends that you keep the toll-free customer service number of your lender handy. It is a good idea to check the status of your loan frequently to ensure that the paperwork is moving forward. Sometimes lenders need additional information and halt the loan process until they have all the information they need. STEP 4: Receive Your Funds After the paperwork is in place, the lending agency will prepare the funds to be released to Southwestern College via electronic funds transfer. Depending on the time of semester, you should expect to see the funds applied to your account within one week of their release. Please note that during peak periods (the beginning of each semester), please allow two to three weeks for the funds to be applied. Prior to delivering the funds to Southwestern, the banks will remove any loan fees they are charging you from the principle. For example, if the lender is charging you a loan fee of 3% and your loan is for $3,000, Southwestern will actually receive $2,910. Repayment on these loans begins approximately 30 days after the second disbursement of the loan (typically late February or early March of the academic year). Preferred Lender List Private Student Loan This loan is offered by Campus Door -- a lender known for their customer service. This lender does not require a co-signer for borrowers with no credit score. Signature Student Loan This is Sallie Mae's alternative loan product. This loan offers great benefits with a fast and easy renewal process. U.S. Bank No Fee Education Loan As stated, this loan is a 0% fee loan offered by U.S. Bank. The loan can be used to retire balances up to 6 months. Back to Top