Alternative or private loans are available to students who are not eligible for federal financial aid or who need additional funds to meet educational expenses. The student's eligibility is determined by the cost of attendance minus other financial aid.
Because alternative loans are not guaranteed by the federal government, they must be insured privately. This extra cost is passed on to the borrower in the form of higher fees and higher interest rates. In addition, the lender will check your credit history as well as other factors to determine if they will lend to you. Some lenders may require a co-signer based on your credit history. You may be denied by one lender and approved by another because of the different ways they interpret information.
Alternative loans are not for everyone. They are expensive and should only be borrowed when all other resources, such as Stafford or PLUS loans, have been exhausted. Always remember that these are loans of last resort. It is important to keep all borrowing within reasonable bounds. Never borrow more than you believe you will be able to repay.
You should find out the following information before deciding on an alternative loan:
- What is the interest rate and what is it based on?
- When does repayment begin?
- Can principal and interest be deferred?
- When is the interest capitalized?
- How much is the loan origination fee?
Students who are new to the private loan application process may want to review eligibility requirements, lender information, and procedures for processing an alternative loan at Louisiana Tech University.
The Division of Student Financial Aid works with all private loan lenders. We encourage students and families to visit multiple lenders’ websites to check on the benefits, rates, and fees they offer. We do not receive any incentives, nor do we have any agreements with any lender.
The Division of Student Financial Aid reserves the right not to certify an Alternative (Private) Loan. All Alternative (Private) Loans used for Louisiana Tech University’s educational costs must be certified by the school.