What is an Alternative (Private) Loan?
An educational loan offered by private lenders that is in the student’s name and usually requires a credit worthy co-signor. This type of loan is used to cover additional expenses not covered by federal aid, state aid, private scholarships, out of pocket payments, and/or payment plans.
What requirements do I have to meet?
Borrowers will be evaluated based on credit history, debt to income ratio, and work history. A student can be approved when applying alone but will typically require a co-signor. Filing a Free Application for Federal Student Aid (FAFSA) is not required to receive Alternative Loan funds. However, you should contact the Financial Aid Office if you wish to waive your right to the FAFSA and Federal Aid. Also students that are selected to complete Federal Verification must complete that process prior to receiving alternative loan funds.
Is there a minimum loan amount that a lender requires that is needed in order to receive an alternative loan from a lender?
Yes and No. Some lenders have minimum loan amounts for example $500 or $1000 however some only have this requirement the first time you borrow through them. Check with your lender prior to applying for these terms and conditions.
What's the Alternative Loan interest rate?
The interest rate is typically based on Prime or LIBOR and a credit check performed by your lender of choice. There is no cap on interest rates for the Alternative Loan. Interest is charged on the loan from the date the first disbursement is made until the loan is paid off.
When should I start applying for an alternative loan for the upcoming school year?
Students should start applying for their alternative loan for the fall/spring semesters starting June 1st of the summer prior to their Fall semester.
How do I apply for an Alternative Loan?
To apply for an Alternative Loan at SUNY Fredonia access our recommended lender comparison list via the "Apply On-Line for Alternative" link below. Once you are approved through one of our recommended lenders, the Financial Aid Office will certify the amount of the loan that the borrower is eligible for and subsequently transmit this information back to the lender for a final guarantee.
How long does it take to process an alternative loan?
Depending on the lender, processing time of year for the school, and the student’s ability to respond back as quickly as possible to requests from their lender it can take as little as three weeks to as long as six weeks.
How much can I borrow?
The yearly limit on an Alternative Loan is equal to your cost of attendance minus any other financial aid you are awarded. For example, if the institutional cost of attendance is $16,000 and you receive $6,000 in other financial aid, you can borrow up to $10,000.
Funds are electronically transmitted to SUNY Fredonia's Office of Student Accounts. The money will then be applied to your semester bill (tuition and fees, room and board, and other school charges). If any loan money remains, you will receive the amount as a refund check typically two weeks after the semester starts. Any remaining loan money must be used for your education expenses.
Can I use an alternative loan to pay off past due balances?
Yes, however only certain lenders have an alternative loan product that can be used to cover a past due balance. Also some lenders will only allow you to use their loan towards a past due balance if it is approved/guaranteed or you have applied for their loan within a certain amount of business days after the last day of the semester in which you are requesting the loan for. Please check with your individual lender for these terms and conditions prior to applying.
Can I use an alternative loan to pay for my semester bill (Tuition, fees, and books) if I am a continuing education or non-degree student?
Yes, however only certain lenders have an alternative loan product that continuing education/non-degree students are eligible to apply for. Check with your individual lender for these terms and conditions prior to applying.
Can I use an alternative loan to help finance my Study Abroad trip?
Yes, however please visit our Study Abroad section on the Financial Aid Office website for further instructions about financing your trip. It is important to begin looking at the financing process of a Study Abroad trip at least a month prior to your departure.
When do I begin repaying the loan?
Repayment can begin within 6 months of when you graduate or drop below half time. Check with your individual lender for repayment terms and conditions.
What do I do if my private loan application is denied?
The student should contact the lender that denied them the loan and determine the reason why they were denied. If they were denied because the co-signor was not eligible then they can either reapply with a different credit worthy co-signor or try applying through a different alternative loan lender (vice versa).