Private loans can help fill the gap after all other forms of aid, such as grants, scholarships, and federal loans have been exhausted. While many students choose to use federal loans, they’re not the only option available to students. Those who want to explore their college loan options comprehensively, without limiting their choices to federal programs, may find that they have a wide range of products to choose from in the private marketplace. Be sure to carefully compare your loan options before taking out a loan, whether it’s federal or private.

Lender Selection

Private Education loans are offered by third-party, private lenders. Credit application and approval is required and must be completed with the lender of the student's choice. These loans have either fixed or variable interest rates which depend on the borrower's credit, co-signer's credit, and the loan market. Consider the following questions when shopping for the right lender of your Private Education Loan.

Interest Rate:

  • What is the current rate?
  • Is it fixed or variable?
  • If variable, how often will it be adjusted?
  • Is there an interest rate cap? Are there reduced interest rates for on-time payments?
  • When does interest capitalize and how often?
  • Will I need to pay the interest while enrolled in school?
  • Will having a co-signer lower the interest rate?

Fees:

  • Is there an application fee?
  • Is there a disbursement fee?
  • Are there any repayment fees?
  • Is a co-signer required?
  • Are there any enrollment requirements?

Repayment:

  • When does repayment begin?
  • What is the length of the repayment term?
  • What will the minimum payment be?
  • Is there a pre-payment penalty?
  • Are there options available to postpone payment in the event of financial hardship?

Disbursement of Funds:

  • How long does it take for the funds to disburse to the school?
  • Will the loan funds be sent electronically or by check?
  • If sent as a check, will it be payable to the student, or the school?

New Truth in Lending Requirements

New provisions in the Truth in Lending Act, implemented February 14, 2010, have resulted in a number of changes in the process for applying for and receiving private education loans. Lenders who provide these loans must comply with the following requirements:

  • Lenders must provide three separate loan disclosures to borrowers - one at the point of application, one when the loan is approved, and one before the loan is disbursed.
  • A waiting period of three business days is required between the time the borrower receives the final loan disclosure and the time that the loan is disbursed.
  • Students must also sign a self-certification form and submit it to the lender before the loan can be disbursed.

Your lender should provide you with all of the information you need to know about these requirements, but if you have questions, feel free to contact our office.

Private Education Loan Self-Certification

  1. Your lender should provide you with a copy of the required Private Education Loan Applicant Self-Certification form (PDF, 142 KB)
  2. To complete your Private Education Loan Applicant Self-Certification form, you will need to know your Cost of Attendance and estimated financial assistance. If you receive financial aid, this information can be found on your financial aid offer in myCI.
  3. Remember to send your completed self-certification form to your lender. Your loan application will not be complete and your loan cannot be disbursed until your lender receives the Private Education Loan Applicant Self-Certification form.
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