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Undergraduate Private Student Loan
Unlike Federal Student Loans, private student loans are specialized education loans based on your credit history and income and should only be considered after all federal loans, grants and scholarships have been exhausted. Private student loans can be used for education-related expenses including tuition, books, transportation and room and board. Since many students do not have extensive credit history, they may need a creditworthy cosigner to increase the chances of getting the loan. You may apply for a private student loan at any time.
Private Student Loan Benefits
- $300 principal reduction graduation reward on every loan upon graduation1
- No Upfront Fees!2
- Lower your interest rate by 0.25% when you choose to have your payments automatically deducted from your personal bank account3
- Rates as low as one-month London Interbank Offered Rate (LIBOR) + 2.5%, currently 4.5326% APR4
- Six-month grace period after graduation while you find a job5
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Private Student Loan Eligibility
- Must be enrolled at least half-time at an eligible school.
- Must be a U.S. citizen or permanent resident or have a cosigner who is.
- You must be the legal age of majority or at least 18 years of age with a cosigner who is legal age of majority.*
- Your permanent residence is NOT in Texas, Wisconsin, Washington, Illinois, or Iowa. (There is no state restriction for cosigners.) Residents of these states should review this alternative student loan option.
- Many borrowers will need a cosigner. Borrowers without a cosigner must have at least 27 months of established credit history.
- Borrowers need to provide proof of enrollment, which includes one of the following: a tuition bill, award letter or recent transcript that is no more than 90 days old from the school the loan is for. Documents must include the student's name, enrollment period, and name of the school. Enrollment period must include the enrollment period you provided on the loan request.
Private Student Loan Repayment Options
You have three options including deferment or repayment of interest only or interest and principle.
Full Deferral: No principal or interest payments due while enrolled in school (up to four consecutive years). Payment of principal and interest will begin 6 months either after graduation or if no longer enrolled at least half time. Interest will continue to accrue during the deferment period and will be capitalized (added to the loan balance) at the time of repayment.
Interest Only: Pay only accrued interest while enrolled in school (up to four consecutive years). Payment of principal and interest will begin either 45 days after graduation or withdrawal from school.
Immediate Repayment: Payment of principal and interest will begin 45 days after loan is disbursed.
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Disbursement of Private Student Loan Funds
Once you receive conditional approval, you will complete a promissory note and be required to submit documentation to verify the information on your application. If you return the requested documents quickly, you will receive your money soon afterward - it typically takes about 14 days but it can take as little as five business days after your conditional approval.
A check will be sent directly to you at your mailing address. Keep in mind, if you have a cosigner, the check will be made co-payable to both of you.
Additional Benefits of the Private Student Loan
- Each private student loan is eligible for a $300 principal reduction upon graduation (proof of graduation is required).
- If you choose full deferment, payments do not have to start on the private student loan until six months after graduation or dropping below half-time status.
- You are not required to make payments while you are enrolled at least half-time in school.
- Your cosigner (if applicable) may be released from the loan after 48 consecutive on-time principal and interest payments are made, provided the borrower meets credit requirements.
- Up to $2,500 in interest may be tax deductible - you should consult a tax advisor for details.
- You will receive a 0.25% interest rate deduction for setting up automatic payments from a bank account during repayment.
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* The legal age for entering into contracts is 18 years of age in every state except Alabama and Nebraska (19 years old), and Mississippi and Puerto Rico (21 years old).
1 Proof of graduation is required.
2 A repayment finance charge may apply based on your or your cosigner's credit history.
3 The 0.25% rate reduction is available to borrowers who arrange with their servicer to automatically deduct monthly payments from their personal bank account. Savings programs are effective for all loans disbursed on or after October 13, 2006.
4 LIBOR stands for London Interbank Offered Rate. The one-month LIBOR is the Current Index, as published in the "Money Rates" section of the Wall Street Journal (Eastern Edition). Your variable interest rate and Annual Percentage Rate (APR) may be higher depending upon your credit history and will increase or decrease if the one-month LIBOR index changes. Your variable interest rate is calculated by adding the current one-month LIBOR index (captured on the 25th business day of each month and rounded up to the nearest 1/8th of one percent) to your margin. The current one-month LIBOR index was 2.500% on 6/1/08. This APR example assumes a $10,000 undergraduate, cosigned, loan disbursed over two transactions with a deferment period of 45 months upon initial disbursement and a six month grace period upon graduation, a 25 year repayment term with no repayment finance charge, and a 2.50% margin. Margins can range from 2% to 8% (depending whether you are an undergraduate or graduate, if the loan is co-signed and upon your or your cosigner's credit history) and repayment finance charges can range from 0% to 5.5% (depending upon your or your cosigner's credit history).
5 Interest will continue to accrue while your payments are deferred, and it will be capitalized (added to your principal loan balance) when repayment begins.
1 Proof of graduation is required.
2 A repayment finance charge may apply based on your or your cosigner's credit history.
3 The 0.25% rate reduction is available to borrowers who arrange with their servicer to automatically deduct monthly payments from their personal bank account. Savings programs are effective for all loans disbursed on or after October 13, 2006.
4 LIBOR stands for London Interbank Offered Rate. The one-month LIBOR is the Current Index, as published in the "Money Rates" section of the Wall Street Journal (Eastern Edition). Your variable interest rate and Annual Percentage Rate (APR) may be higher depending upon your credit history and will increase or decrease if the one-month LIBOR index changes. Your variable interest rate is calculated by adding the current one-month LIBOR index (captured on the 25th business day of each month and rounded up to the nearest 1/8th of one percent) to your margin. The current one-month LIBOR index was 2.500% on 6/1/08. This APR example assumes a $10,000 undergraduate, cosigned, loan disbursed over two transactions with a deferment period of 45 months upon initial disbursement and a six month grace period upon graduation, a 25 year repayment term with no repayment finance charge, and a 2.50% margin. Margins can range from 2% to 8% (depending whether you are an undergraduate or graduate, if the loan is co-signed and upon your or your cosigner's credit history) and repayment finance charges can range from 0% to 5.5% (depending upon your or your cosigner's credit history).
5 Interest will continue to accrue while your payments are deferred, and it will be capitalized (added to your principal loan balance) when repayment begins.
