Alternative Loans

Private education loans not guaranteed by federal funds are commonly called “alternative loans” and have different eligibility criteria determined by the individual lenders.  We recommend that parents and students consider these programs after Stafford and PLUS loan options have been explored.  Some characteristics of alternative loans include:

• No FAFSA needed for alternative loans
• Interest/repayment terms set by lender
• Other aid affects amount you may borrow
• Eligibility criteria determined by lender
• Credit check required
• Lender may require co-signer
• Maximum loan eligibility is cost of attendance minus other financial aid.  
  

 

Lender Name, Web Link and Phone Number	Must be enrolled in degree program?	Must maintain satisfactory academic progress?	Borrow for prior balance?	Minimum Enrollment
Key Alternative Loan 1-800-539-5363	YES	NO	YES	6 credits
Maine Loan 1-800-922-6352	NO	NO	YES	6 credits
CitiAssist 1-800-967-2400	NO	NO	YES	3 credits

 

Questions to Ask When Evaluating Loan Programs:

 

1. Is eligibility for the loan income-based or credit-based?
2. Does having a co-signer decrease the interest rate and/or loan fees?
3. What are the credit criteria for the borrower and co-signer or endorser?
4. Is school certification required?
5. What are the loan fees and when are they paid?
6. How is the interest rate calculated? Is it fixed or variable?
7. What is the current interest rate and the Annual Percentage Rate (APR)?
8. Is there a grace period?  If so, how long?
9. When does repayment begin?
10. Are there deferment, forbearance and cancellation provisions?
11. What are the repayment options?