What is a private alternative loan?
A number of private lenders and other financial institutions offer education loans to students. These loans are referred to as private alternative loans.
How does a private alternative loan differ from a federal loan?
These private alternative loans are not subsidized, and generally have tiered interest rates and fees, both based on your credit score. In addition, cosigners may be required. Unlike Federal Direct and Federal Grad PLUS loans, private loans do not have an income-based cap on monthly repayments. Therefore, Penn encourages U.S. citizens and permanent residents to first consider the Federal Direct and Federal Direct Grad PLUS loan programs when they need to borrow. Review a comparison of Federal Grad PLUS and private alternative loans.
Can Penn recommend the best private alternative loan?
Because interest rates and fees on most private loans are tiered, based on your credit score, Penn cannot provide you with useful information about comparative pricing of private loans for you, nor about the likelihood of your being approved without a cosigner. To assist you, however, we have listed below, in alphabetical order, those private lenders who have made five or more private educational loans to Penn students over the past three years, who have not, to our knowledge, suspended making education loans, and who have electronic processes and links to Penn that expedite loan origination and disbursement.
Need more information?
Further information about private loans and selecting a lender is available at FinAid.org and Student Lending Analytics. Another useful tool can be found at the Pennsylvania Private Loan Marketplace through which you can compare rates and terms from multiple participating lenders side by side, based on your credit score. At this point, a limited number of lenders are participating in this service.
Before applying for any private alternative loan program, be sure to get free copies of your credit reports at www.annualcreditreport.com and clean up any errors that may be listed.
How To Apply
Apply through the website of the lender you choose.
Note: A requested amount of $100,000 or more must be divided into two loan requests. Lenders cannot recieve a certified loan amount of $100,000 or more electronically from the school.