Private Loans (also referred to as Alternative Loans) are used to help bridge the gap between the cost of your education and the amount available from state and federal financial aid programs. Private Loans may carry higher interest rates, require a co-signer, and/or offer different repayment options than federal loans. Each loan program will differ, so it is important that you know the terms and conditions of the loan, as well as your rights and responsibilities as a borrower. It is recommended that students borrow wisely. Before you look at private loans, please make sure that you have exhausted all possible federal and state financial aid funds available. Our office strongly recommends that students file the Free Application for Federal Student Aid (FAFSA) before applying for private loans.
FastChoice will enable you to research and compare numerous lenders and loan programs.
Private loans for the next academic year will not be processed prior to July. Most lenders require a credit check which is only valid for 90 days. Please keep this in mind when applying for private loans.
*Processing time can take up to one month depending on current volume.
You will need to choose a lender and apply for the loan directly using the lender's online application on their website. You may conduct your own research and apply using any lender you wish. Our office will certify Private Loans from any lender.You may need to apply for a Private Loan with a co-signer. A co-signer is someone who signs your promissory note along with you. By co-signing your promissory note, this person assumes responsibility for the loan if you fail to repay it. If you have limited or damaged credit history, applying with a co-signer can increase your chances of receiving a private loan with the most attractive terms. If you are not a U.S. citizen or permanent resident alien, you may be required to apply with a co-signer.
Once you choose a lender and apply for the loan (online or in person), the lender will notify you of the results of your credit check. If approved, your lender will notify UW-Whitewaterl of your loan request. Most lenders won't notify our office until you have completed the application process and sign the promissory note. When the Financial Aid Office has all the necessary information we will certify the loan based on your cost of attendance and communicate with the lender directly to request disbursement. If a loan is certified prior to the beginning of the semester we will certify your loan as a full time student unless you request another enrollment status in writing. Please notify our office as soon as possible if you are not going to be enrolled full time. If any additional information is required, you will be contact by e-mail to your UWW e-mail account or by paper to your address on WINS.
Once the funds are disbursed to our school, your student account will be credited with the loan funds. These funds will be applied towards tuition, room & board, fees and other charges. Remaining amounts will be refunded to you. You can receive your refund as a check via US Mail or you can sign up for e-Refunding to have the funds directly deposited into the bank account of your choice. Checks are mailed to the local address while school is in session; when school is not in session, checks are mailed to the home address.
The maximum amount that a student may borrow cannot exceed the cost of attendance minus any other aid. Your cost of attendance information is available in your WINS account. To view your cost of attendance information follow these steps:
You are encouraged to borrow only the amount necessary to cover that portion of your educational expenses that cannot be covered by other means. Please keep in mind Private Loans can only be used to cover educational expenses. Never borrow more than you can comfortably repay. Once you accept a Private Loan, you have a legal obligation to repay the loan, all applicable fees, as well as the interest that has accrued.
Only a few lenders allow students to apply to cover a past due balance from previous years. Make sure to check with your lender to see if this is an available option. Some of the lenders that allow loans for previous years are:
Most Private Loan programs do not charge borrower fees. Some Private Loans come with one-time fees that represent a percentage of your requested amount. Private Loan fees vary from lender to lender. Fees usually come in two forms:
Private Loans may offer the borrower a choice between fixed or variable interest rate. These rates are based on either the Prime Rate or LIBOR. The credit scores of the borrower and co-signer will determine your interest rate. We recommend that you obtain your credit score prior to applying. To obtain a free credit report visit www.annualcreditreport.com. Interest accrues on Private Loans from the date of disbursement.
For example, if your loan has an interest rate of LIBOR + 2.55%, and LIBOR is 4.00%, your interest rate is 6.55%. As long as you hold your Private Loan, interest will continue to accrue to your total loan amount. Percentage points may be added to (or subtracted from) these rates and your lender may use an average rate over a specific period instead of actual current rate. The formula used to determine your variable interest rate will be described out on the promissory note you must sign to accept the loan. Make sure you know your interest rate information before signing the promissory note.
Your credit report is a valuable tool to keep track of your debts, available credit, and payment history.
1. How much debt do you have?
2. How consistently do you pay your obligations?
3. How long have you been managing your debt?
4. Have you applied for and recieved new loans or credit recently?
5. What kind of credit or loans have you been extended?
Lenders use your credit report to determine if they want to approve your loan or credit card and what kind of interest rate they'll offer you. The higher your credit score is, the better chance you'll have of getting a loan when you need it at a good interest rate.
A credit score can range from around 300 to 850. An "A" score is 720 or higher. A score from 680 - 719 is considered "B". Scores down to 650 or 660 are "C". Going below 650 is something you want to avoid.
Credit scores are based on several factors:
Repayment typically begins six months after you graduate, drop below half time or withdraw from school. Some Private Loans begin repayment immediately after disbursement, so be sure to compare different loan programs. Contact your lender for more information.
It is important to understand how your loan balance will capitalize before you enter repayment.
Capitalization refers to accrued and unpaid interest that is added to your loan's outstanding principal balance. Your billing statement might show a principal loan balance that is more than the original amount that you borrowed. That is due to interest that has been accruing since your loan was originally disbursed. The more frequently interest is added to the principal loan balance, the more interest you will pay. Capitalization can occur when your grace period ends, or at the end of a period of forbearance or deferment.
It is always beneficial to make a payment, even when you're not required to. Interest will accrue even while you are in a deferment of forbearance. Making a payment can reduce the amount of accrued interest, which in turn, will reduce the amoun of capitalized interest and the balance you owe. Ask your lender about making interest only payments while you are still in school.
10 tips to consider when it is time for repayment:
As a borrower, you have the right to:
As a borrower, you are responsible for:
**Remember to always keep written records of all forms, applications, and correspondence with your lender for the entire life of your loan.