Direct to Student Frequent Questions
How much can I borrow?
A private student loan allows you to pay for education related expenses up to the cost of attendance. Certain annual limits may apply, and can vary by lender.
What proof of enrollment do I need to provide?
Proof of enrollment usually includes one of the following: a tuition bill, award letter or recent transcript that is no more than 90 days old from the school the loan is for. Documents must include the student's name, enrollment period, and name of the school. Enrollment period must include the enrollment period you provided on the loan request.
What are the different repayment options?
You have three options including deferment or repayment of interest only or interest and principle.
Full Deferral: No principal or interest payments due while enrolled in school (up to four or five consecutive years). Payment of principal and interest will usually begin 6 months either after graduation or if no longer enrolled at least half time. Interest will continue to accrue during the deferment period and will be capitalized (added to the loan balance) at the time of repayment.
Interest Only: Pay only accrued interest while enrolled in school (up to four or five consecutive years). Payment of principal and interest will begin after the loan is fully disbursed.
Immediate Repayment: Payment of principal and interest will begin after the loan is fully disbursed.
How soon will I receive my funds?
Once you receive conditional approval, you will complete a promissory note and be required to submit documentation to verify the information on your application. If you return the requested documents quickly, your school will receive the money soon afterward — it typically takes about 14 days but it can take as little as five business days after your conditional approval.
What is my interest rate?
The Interest rate is a combination of the LIBOR rate or the Prime rate, plus a margin. The margin is based on you and/or your cosigner's credit. The rate will fluctuate as the LIBOR or Prime rate changes. Applying with a credit worthy qualified cosigner may help you qualify for a lower rate.
LIBOR is an interest rate index used to determine the interest rate at which banks borrow funds from each other in the London Interbank market. It stands for the London Interbank Offered Rate. The Academic Answer product uses the current one-month LIBOR which can be found in the "Money Rates" section of the The Wall Street Journal (Eastern Edition).
The Prime rate is a "reference or base rate" that banks use to set the price or interest rate on many of their commercial loans and some of their consumer loan products. The prime rate tracks fairly closely with other short-term interest rates, such as the overnight federal funds rate.
Can I defer my payments while I'm in school?
Yes, you can typically defer your payments for up to 60 months as an undergrad student.
How is the interest rate calculated for the private student loan?
The variable interest rate is calculated by adding the current LIBOR or Prime rate to a margin.
Are there fees associated with the private student loan?
Based on your credit history, there may be fees associated with origination, disbursement or repayment. Fees can vary significantly by lender.
How much can I borrow with the private student loan?
The loan typically offers an annual maximum of the cost of attendance, as determined by your school.
Is there a grace period?
Yes. If you choose full deferment, payments do not have to start on the private student loan until six months after graduation or dropping below half-time status.
Is there a minimum monthly payment?
Yes. Once principle and interest payments begin, the minimum monthly payment is $50.
What expenses can the private student loan cover?
The private student loan can be used to cover education-related expenses including tuition, fees, books, living expenses, a new computer, etc.
Do I have to be enrolled at least half-time to receive a private student loan?
Yes. Borrowers must be enrolled at least half-time in an eligible and participating school in order to receive a private student loan.
Does your private student loan offer any discounts?
The student may be eligible for a 0.25% rate reduction, if the payments are automatically deducted from a personal bank account. Private student loan discounts vary by lender.
Is the interest tax-deductible?
Interest on student loans may be tax deductible. Please consult your tax advisor or visit irs.gov for more information.
How long are repayment terms for a private student loan?
The standard repayment term is 15-25 years.
What are the benefits of the private student loan?
- Six-month grace period while you find a job
- Generous repayment terms
- Students may be eligible for a 0.25% interest rate reduction by signing up for Direct Debit when they begin paying on the loan
- Rates are variable, and can be based off the Prime rate, and/or the LIBOR rate plus a margin for credit.1
- Borrow up to the annual cost of attendance minus financial aid received.
- Defer payments until after graduation2
LIBOR stands for London Interbank Offered Rate. The one-month LIBOR is the Current Index, as published in the "Money Rates" section of the Wall Street Journal (Eastern Edition). Your variable interest rate and Annual Percentage Rate (APR) may be higher depending upon your credit history and will increase or decrease if the one-month LIBOR index changes
The Prime rate is a "reference or base rate" that banks use to set the price or interest rate on many of their commercial loans and some of their consumer loan products. The prime rate tracks fairly closely with other short-term interest rates, such as the overnight federal funds rate. Your variable interest rate and Annual Percentage rate (APR) may be higher depending your credit history and will increase or decrease if the Prime rate changes.
- Interest will continue to accrue while your payments are deferred, and it will be capitalized (added to your principal loan balance) when repayment begins.