Private Loans

Private loans are non-federal educational loans through a private lender which allow student to borrow additional funds after federal student aid has been exhausted.

Each lender has different eligibility requirements, interest rates, fees, and repayment terms. For example some lenders may require students to be enrolled at least half-time in a degree granting program, while different lenders may lend to a student that is non-degree or enrolled less than half-time. Some lenders require payments while students are still in school. Private loans cannot be consolidated with federal loans for payment purposes.

IMPORTANT TIPS:

  • It is in your best interest to borrow the maximum amount of federal student loans before you borrow from a private lender.
  • Students should apply for a private loan with a creditworthy co-signor to ensure the best rates and terms.
  • Students cannot go over their Cost of Attendance with their federal aid and private loans
  • Students applying for any private (non-federal) educational loan must complete a Self-Certification form. More information available here.

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WHEN TO APPLY:

  • Do not apply too early for a private loan because lenders have an expiration date on the credit check.
  • Your application will not be certified until after you are registered for classes and have been reviewed for all federal and state financial aid.
  • Submit your application between June 1 and the third week of July for the upcoming academic year (fall and spring semesters) to have funds available for your fall bill. If you are applying for the spring semester only, please complete your application between October 15 and December 1.
  • A separate loan application is required for the summer term and for each academic year.

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COMPARE PRIVATE LENDERS:

You have the right to select the private lender of your choice. The following link for ELMSelect is a private loan search engine where you can compare different lenders and loan products. Neither WVU nor the Financial Aid Office intends any specific endorsement of these lenders.

Connecticut, Maine, New Jersey, and Rhode Island offer private loans to their residents. See “Private Loans Available by State Agencies” below.

ELMSelect

Private Loans Available by State Agencies

The following is a list of state agencies that offer private loans to their residents:

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PRIVATE LOANS VS. FEDERAL PLUS LOANS

There are differences between federal and private lenders such as the borrower, the lender, interest rates, fees, and terms. The information and chart below can help you compare options.

Parents: Top 4 Differences Between the Parent PLUS and Private Loans

  1. Lender: The lender for Parent PLUS Loans is the federal government. Private lenders – banks or credit unions – are the lenders for private student loans.
  2. Borrower: With Parent PLUS Loans, the parent applies for the loan, and the loan/debt remains in the parent’s name. Only parents of students who are dependent for federal aid purposes can apply for this loan. With private loans, the student or the parent (depending on the lender) may apply for the loan. If the student applies for the private loan, they may need the parent as an endorser/cosigner (depending on the student’s credit history).
  3. Interest Rate: Parent PLUS loans have fixed interest rates for the life of the loan. Interest rates can be found at studentaid.ed.gov. Interest rates for private loans are based on the borrower’s credit history. The lender may offer fixed or variable interest rate options to the borrower.
  4. Loan Terms: PLUS Loans can be deferred while a student is enrolled at least half-time at an accredited institution. This may not be true for all private loans. There may even be a limitation on the amount of time a borrower qualifies for an in-school deferment. In addition, PLUS loans generally have more flexible repayment options than a private lender may provide.

Graduate/Professional Students: Top 4 Differences Between the Graduate PLUS and Private Loans

  1. Lender: The lender for Graduate PLUS Loans is the federal government. Private lenders – banks or credit unions – are the lenders for private student loans.
  2. Borrower: With Graduate PLUS Loans, the student applies for the loan. With private loans, the student or the parent (depending on the lender) may apply for the loan. The student may need the parent as an endorser/cosigner (depending on the student’s credit history).
  3. Interest Rate: Graduate PLUS loans have fixed interest rates for the life of the loan. Interest rates can be found at studentaid.ed.gov. Interest rates for private loans are based on the borrower’s credit history. The lender may offer fixed or variable interest rate options to the borrower.
  4. Loan Terms: PLUS Loans can be deferred while a student is enrolled at least half-time at an accredited institution. This may not be true for all private loans. There may even be a limitation on the amount of time a borrower qualifies for an in-school deferment. In addition, PLUS loans generally have more flexible repayment options than a private lender may provide – especially for students borrowing a Graduate PLUS loan.

Chart Comparison of PLUS Loans vs. Private Loans

Click here for a side-by-side comparison of private, Graduate, and Parent PLUS Loans.

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