Alternative Loans
Alternative loans can supplement federal student aid to complete your college funding.
If you have checked into scholarships, applied for grants, received a federal Stafford and/or PLUS loan, and still have costs to cover for college, now is the time to consider an alternative or private loan.
Consider This
- Alternative loans typically have higher interest rates, more fees, and less flexible repayment options than federal loan programs.
- They should be used only if:
- You need additional funds after obtaining financial aid through scholarships, grants and federal loan programs.
- You are ineligible to receive Stafford or GraduatePLUS loans or your parents are ineligible (or not willing) to receive a ParentPLUS loan.
- Alternative loans are not part of federal programs like the Federal Family Education Loan Program. Therefore, loan terms and limits vary substantially by program and lender. They are based on creditworthiness and may require a co-signer.
Understand the Differences
Compare the benefits of borrowing a Stafford or PLUS loan versus an alternative loan. Download a side-by-side comparison of interest rates, loan fees, repayment terms, and more.
- Federal Stafford vs. Alternative Loans (62 KB PDF)
- ParentPLUS vs. Alternative Loans (56 KB PDF)
- GraduatePLUS vs. Alternative Loans (56 KB PDF)
Take care to borrow only what you need to cover your education costs, not what you are eligible to receive.
Ask Smart Questions
- How much may I borrow?
- What are the fees associated with the loan?
- What are the interest rates and how often will they change (e.g., quarterly)?
- Do I need a co-signer?
- Can I receive a lower interest rate when I apply with a co-signer?
- Can I defer payments while in school?
- What are the terms of repayment?
- Are there any penalties for paying the loan off early?
- Can I receive combined billing with my Stafford loans?
Get Advice
- Your school’s website or financial aid officer can help recommend an alternative loan.
- Contact us.