Private or Alternative Loans

What are they?

Private or Alternative loans are educational loans offered by a non-federal lender (e.g., a private lender, an institution, or credit unions). These loans are not guaranteed by the federal government and may carry higher rates than the loans offered under the federal loans program. Learn more.

How to apply

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. UC Lender List provides you with recommended options. Learn more about preferred lenders.


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. Private loans are based largely on your credit or the credit of your co-signer.

When it comes to finding the right private student or right lender, you’ll need to do some shopping around. One option is to look at the list compiled by the University of California, Office of the President, you may choose a lender from this list, your own lender or any lender.

However you decide to choose, you should always consider Direct Loans first, and these are some of the reasons:

Direct Loans have many benefits that private/alternative loans don’t typically offer, such as:

  • Low fixed interest rates
  • Flexible repayment plans, some based on income
  • Ability for cancellation, discharge, and forgiveness of loans under special circumstances
  • Deferments, forbearance and postponement due to economic hardship.
  • Learn more about the differences between Direct Loans and private loans.

Do you need to schedule a phone appointment?

Hop on the QLESS to schedule a phone appointment.