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Private Alternative Loans
Missouri S&T encourages you to take advantage of all sources of federal, state and university aid before turning to private loans (also called alternative loans).
Private loans do not require students to submit a FAFSA, are based on credit-worthiness and may have a variable interest. Private loans must be repaid separately from federal loans once you are no longer enrolled at least half-time. We are not able to suggest a particular lender to you. Learn the differences between federal and private student loans.
- Private loans are designed to help students with educational expenses after all federal, state and institutional aid has been received
- Students are responsible for all interest charges
- Most private loans will require a credit-worthy co-signer
- Private loans may have higher interest rates than federal loans: Current prime and LIBOR rates.
- Interest rates can be variable or fixed and have no cap
- Private loans cannot be included in a federal consolidation loan
- Each time you apply, your credit is reviewed
- If you plan to attend graduate school, check with your lender to determine if your loan can be deferred
For more information: Student Loans: Choosing a loan that's right for you
When completing the application, you will be asked to supply a loan period. Loan periods include the following:
- August to May for the full year
- August to December for fall term only
- January to May for spring term only
- June to August for summer term only
*Note: Summer term always requires a separate application.
Missouri S&T maintains a historical list of all private lenders who continue to participate in the Private Student Loan program and who have provided funds to Missouri S&T students since the 2017 spring semester. These alternative loans are governed by certain federal regulations but are funded through a private lending institution.
Choosing a lender is an important financial decision. We encourage you to extensively research your private loan lending options to identify the lender whose terms best meet your needs. This list is not inclusive of all lenders who offer private loans nor does it infer any preferences to these lenders. The lenders in the list are in no specified order, and the order of the list does not imply a preference for a particular lender. Missouri S&T does not endorse any lender. You may choose any private loan lender you prefer whether or not they are listed on the website below.
FASTChoice is an online loan comparison solution, customized for S&T, to help you make informed educational loan choices. FASTChoice is not a lender, and the site is an independent, web-based, student loan comparison tool. You can apply online directly from the website. Please remember that you can choose any lender even if they are not on the FASTChoice website.
Considerations when comparing lenders
Interest rates determine how much you pay to borrow money. A higher interest rate means you have to repay more than a lower interest rate. The expense is calculated as a percentage of the unpaid principal amount of the loan and is offered in two forms--Variable or Fixed. A variable interest rate will change periodically over the term of the loan whereas a fixed rate will not.
The percent or flat-rate, if any, charged to borrow a private loan. Lenders may charge other fees besides interest on the loan. A good rule of thumb is that 3-4% in fees is about the same as a 1% higher interest rate. Look for loans with no ($0) application and origination fees.
The approval for a private loan is based on traditional factors like credit score and income level. In some cases, borrowers require a co-signer to apply for the loan with them so that they can get approved. Not everyone can qualify for private loans because of the more difficult approval criteria.
Some private loans allow you to remove the co-signer from your student loan after you've made a certain number of on-time payments. The release is possible because you, the student, have proven you can repay your student loan, are not likely to default on your loan, and have also qualified as a credit-worthy borrower. By releasing your co-signer, they will no longer be responsible for your student loan debt; instead, you will be the only person responsible for repayment of the loan.
Look for customer reviews or experiences from other students on the lenders' website or seek out independent reviews. Questionst to consider: Are the customer service representatives available 24/7? Can you apply online? How quickly will you know a decision?
Private loans cannot be included in a federal consolidation loan. However, if you have multiple private student loans, consolidating them into a new loan may be advantageous. You may be able to remove a co-signer at the time of consolidation, or you may be able to get rid of a variable interest rate.
Private loans require credit checks. Each time you apply, your credit is reviewed and your credit score is affected. If you do not have a credit history, you will need a co-signer with a good credit history and credit score. Typically, the better the co-signer's credit history and score, the better the interest rate and other terms will be.
Most private student loans have several types of limits on the amount you can borrow, including the following:
- Annual Loan Limits-An annual limit specifies the maximum amount you can borrow in a single academic year
- Aggregate Loan Limits- An aggregate limit, sometimes called a cumulative limit, specifies the total amount you are allowed to borrow during your academic career
- Cost of Attendance Limit-A cost of attendance (COA) limit specifies that the loan amount must be less than the school's official cost of attendance minus other financial aid received
Repayment plans will vary by lender. Questions to consider when deciding on a lender include the following:
- Are payments required while you are still attending school?
- What is your grace period?
- Do they offer deferment/forebearance options if you are having trouble financially?
NOTE: Look for a loan with no penalties for early payoff.
The "waiting period" before repayment of student loans is called a grace perior or an interim period. For most student loans, the grace period is six months from the time you graduate, leave school, or drop below half-time enrollment. However, with private student loans, there is no standard grace period because each private loan is specifically governed by the controlling loan document between the lender and the borrower.
A period where you postpone making payments on your loan but interest may still accrue. Private loans offer very limited options for deferment but may include the following: enrollment in school, economic hardship, military deployment or unemployment.
A period during which your monthly loan payments are temporarily suspended or reduced. Payments on your loan are postponed, but interest will accrue during the forbearance period. Forbearance is intended as temporary relief during a financial crisis.