How to Apply for a Private Loan
Before borrowing a private loan, carefully consider your debt and repayment obligations on all loans. Determine how much you need to borrow by working out a budget for your educational costs and subtracting all of your available resources for those costs.
Remember: Borrow only what you need. Private loans must be repaid in addition to any federal loans you may borrow. You should not, and may not, be permitted to borrow a private loan for more than your cost of attendance for the period of enrollment (usually the school year) minus any other federal, state, and institutional aid you have or will be awarded for that period.
If you've decided to apply for a private loan, here are the general steps to follow to begin the application process.
- Contact your financial aid office to inform them of your interest in a private loan and, in some cases, to obtain the Private Education Loan Applicant Self-Certification Form.
- Check with your lender regarding an online application/promissory note process and whether the Private Education Loan Applicant Self-Certification Form is part of this process or is handled a different way. Ask if the lender needs additional documentation to determine whether you qualify for the loan. If an online promissory note is not available and the lender instead sends you a paper promissory note and a Private Education Loan Applicant Self-Certification Form, follow directions for completing and returning the forms.
- Your lender will provide you with several loan disclosures before funding your private loan. Read them carefully as they provide you with important information about accepting and cancelling your loan. Upon approval of your loan, you will receive a disclosure from the lender that requires you to accept the terms and conditions of the loan within a specified deadline. At this point, you should continue to carefully consider whether you need a private loan. Prior to disbursement of your loan, you will receive one last disclosure. You will have three business days after this disclosure to make your decision. After the three-day period, if you have not indicated that you want to cancel the loan, the lender will disburse your loan money.
- Contact your lender's customer service center with questions regarding interest rates, loan terms, etc.
- Maintain your application/promissory note and other loan-related records in one file to help you understand your loan obligations. Your promissory note describes your rights and responsibilities associated with your private loan.
- Borrow only what you need. Be an informed borrower. Know the total amount you have borrowed, the interest rate applicable to your loan(s), and your repayment requirements for all loans you borrow.
Category Article How to Apply for a Private Loan
