Private Loans / Alternative Loans
Alternative loans are available from a variety of banks and lenders. The terms and rates for alternative loans are usually not as good as the Federal Direct Loans, but are generally a better option than using your credit card to pay your educational costs.
Applying for and Receiving an Alternative Loan
- You can apply for an alternative loan by contacting the lender directly.
- Often they will require our office to certify that you are a student and what your costs are for the year.
- The bank will send the loan funds directly to UCI.
- Checks usually arrive at UCI 10 days prior to the fee deadline.
- Once your check arrives, you may need the funds to pay your fees. You can sign your check over to UCI to be deposited into your ZotAccount to pay your fees. Your remaining funds will be disbursed to you on the first day of the quarter, if your fees have been paid. Please call (949) 824-3774 for more information or clarification regarding the procedure for using your alternative loan funds to pay your fees.
- If you paid fees on your own, your alternative loan check can be picked up the first day of the quarter.
- Checks are picked up at Financial Services, 101 Aldrich Hall.
- Should you want to check on the status of your loan, you need to check with the lender directly.
Alternative Loan Options
There are a number of lenders who provide alternative loans. The University has developed a system-wide common lender list based solely on factors related to the borrower's best interest: financial terms of the loan, loan features and the quality of service. The UC Lender List provides you with our recommended options.
Be An Informed Borrower
Loan provisions and requirements vary greatly and change frequently. You should contact the lender for specific information regarding the most current interest rate, fees and eligibility requirements before taking a loan. You should carefully research the loan company you are considering doing business with. The Federal Trade Commission has a helpful website that provides tips on items to look for when selecting a lender.
Important Information About Applying
Once you have decided to apply for an alternative loan allow 3-5 business days to have your application forwarded to our office. When you have completed your application online you should notify our office either via email at email@example.com or calling (949) 824-8262.
Paying Fees With Your Funds
Funds will be disbursed at the beginning of each quarter. If you would like to use your loan funds to pay your fees you must notify our office at least two weeks prior to the fee deadline.
Items to Consider When Comparing LoansEligibility
To ensure that you are fully informed, you should read the lender's application and promissory note fully for specific information regarding the terms and conditions of your loan. Important questions to ask before taking a loan include:
Interest Rates and Fees:
- What are the minimum and maximum loan amounts offered per year and cumulatively?
- Is the amount you are eligible to borrow tied to school costs and other financial aid received?
- What is the approximate time it takes to obtain a decision for loan approval?
- Are there any minimum enrollment requirements? If so, what are they?
- What are the credit criteria for loan approval? Do they include a debt-to-income ratio or other income requirements?
- What is considered "poor credit"? Is no credit considered "poor credit"?
- What steps will the lender take to help qualify borrowers with "poor credit"?
- Are co-signers an option or a requirement? Under what conditions are they required?
- Is there an option to release the co-signer at a later date? If so, what are the conditions?
Repayment Terms and Conditions:
- What is the interest rate? What is it based on (i.e. Prime, T-Bill, etc.)?
- Is the interest rate fixed or variable? If variable, how frequently can the rate change?
- Is there a maximum amount the interest rate can increase with each change?
- Is the loan adjusted based on a rate changes? For example, will interest be capitalized (added to the principal) or will the repayment term or amount be adjusted?
- What fees are charged? When and how are fees paid?
- What is the total cost of the loan over the life of the loan?
- What are the minimum and maximum repayment terms and payment amounts?
- Are there any restrictions or special conditions you need to consider?
- When does repayment begin? Is there a grace period before payments are expected? If so, how long is it?
- Can payments be deferred? If so, under what circumstances?
- Are payments required while you are in school?
- Are there any prepayment penalties?
After originating a loan, the lender can keep the loan until it is paid in full, sell it to a secondary market or keep it and contract with a servicer to manage the day-to-day details of tracking and collecting loan payments?
- When are the loan funds disbursed?
- Will you have online access to the application process and for account inquiry?
- Who do you contact for questions about your loans?
- Can the lender combine your private and federal loan payments into one bill?
The State of California requires that you be told the following:
Students considering student loans need to be aware of the differences between federal student loans and private student loans:
- Federal student loans are required by law to provide a range of flexible repayment options including, but not limited to, income-based and income-contingent repayment plans, as well as loan forgiveness benefits that private lenders are not required to provide.
- Federal direct loans are available to most students regardless of income. Other qualification criteria do apply. For more information, please visit http://www.studentaid.ed.gov/eligibility.
- Private student loan lenders can offer variable interest rates that can increase or decrease over time, depending on market conditions.
- The interest rate on a private loan may depend on the borrower's and/or co-signer's credit rating.
- Private student loans have a range of interest rates and fees and students should determine the interest rate of, and any fees associated with, the private student loan included in their financial aid award package before accepting the loan. Students should contact the lender of the private student loan or their UC campus' financial aid office if they have any questions about a private student loan.
Some UC campuses offer students their own private (institutional) student loans. Students offered a UC institutional private student loan should know that:
- Interest rates on UC loans will be fixed, not variable
- UC loans can have a range of interest rates
- UC loans are not awarded based on the credit history of the borrower
- UC loans do not require a co-signer.
(Reviewed 8/21/2012 - BS)