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Private Student Loans

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Private Student Loans

Private loan programs are designed to bridge the funding gap when savings, grants, federal loans, and other resources are not enough or simply not available. Students have the option to borrow private loans directly from a lender. There are many options available to you. It is important to note that all loans are not equal. Pay special attention to interest rates, fees, credit scoring and co-signing. An online lender comparison list is provided to assist you in reviewing your loan options. Please contact the Office of Financial Aid if you choose not to utilize a lender from the list so that we are made aware of your loan application.

Before you look at private loans, make sure that you have exhausted all possibilities for federal and state financial aid programs. Exploring your options now may save you time and money in the future. If you have specific questions or concerns regarding private loans, we suggest you contact the lender directly.

New Federal Regulations as of February 14, 2010 require students to complete a Private Education Loan Self-Certification Form in addition to a loan application. Students are required to return this form to their lenders prior to disbursement of the loan. In order to complete this form you will need to know your Cost of Attendance and Estimated Financial Assistance. You can find this information in your Self-Service Banner account under the Financial Aid tab, on the Financial Aid Status screen.

Helpful Tips for Choosing a Private Loan
  • Welcome to FASTChoice.  FASTChoice helps you request the loan you determine is right for you by providing detailed information for various loans, as well as the terms and benefits offered by different lenders.
  • Private loans are educational loans through a lending institution and not part of federal government programs.
  • Private loans are more expensive than federal government guaranteed loans and should only be used when all other options have been exhausted.
  • Be sure you have applied for all available scholarships, grants, work-study and federal loan programs offered by Otterbein University before borrowing from a private loan program.
  • Eligibility for most of these Private loan programs is based on the credit-worthiness of the borrower. If you have not yet established credit in your own name you may be required to obtain a credit-worthy co-signer. Once a complete application has been received, the lender will perform a credit check and will let you know if your application has been approved.

NOTE: The inclusion of a loan program or lender on this site does not imply endorsement. Although the list is narrowed to certain lenders, Otterbein does not endorse any private loan programs or lenders. This is simply a tool to enable you to explore private education loan offerings. Note that information is subject to change at any time, and we are not responsible for the content of lender websites. Contact lenders directly to confirm details or get current information.

What to Look for in a Private Loan

Annual Percentage Rate (APR)
The APR is the annual cost of your loan including the effect of any fees and charges in addition to interest. The APR is determined based on the terms of the loan. APRs will differ based on the terms and loan amount. Make sure you are comparing like loan amounts when comparing APRs to receive a true comparison. Note: if the rate is variable, the APR may be increased after consummation of the loan. Take these terms and APRs into consideration when borrowing a private loan.

Repayment Incentives
Does the private loan reward borrowers who make payments on-time? For example, after 48 consecutive on-time payments will you receive an interest rate reduction?

Loan Limits
Does the loan have an annual or aggregate limit? Can you afford to borrow within these limits? It's a good idea to borrow from the same lender each year, so make sure the loan can cover your costs throughout your entire education.

Do you need to know quickly if you qualify? Does the lender offer loan pre-approval over the phone or internet?

Cosigner Requirement
Does the private loan require you to have a cosigner? Sometimes cosigners reduce the costs of the loan, but if you can't find a cosigner, you'll need to find a private loan you may borrow on your own. Does the loan offer a cosigner Release option? Some loans will release your cosigner after 24 consecutive on-time payments, with an approved credit check.

Interest Capitalization
If you choose not to pay the interest on your loan while you are in school, the interest may be capitalized (added to your principal balance). When is the interest capitalized? Annually? At repayment? If the interest is capitalized annually the loan is more expensive than if it is capitalized only once at repayment. Some loans now require monthly interest payments while in school.

Does repayment begin immediately or after you graduate or leave school? Make payments whenever you can afford to, but if you can't make regular payments while you're in school, you'll need to find a loan that doesn't require immediate repayment. Some loans now require monthly interest payments while in school.

Repayment Period
How long is the repayment period in which you repay the loan? If your educational costs require you to borrow large amounts, you may need a longer time to repay the loans.

Give Yourself Credit!
Lenders use credit scores to make fast and objective decisions on which applicants are likely to repay their loans on time. Credit scoring is calculated using many pieces of your past bill payment history (number and types of accounts, late payments, outstanding debt, and the age of your accounts). The way you have handled credit in the past is often a good indication of how you will manage credit in the future. Therefore, your credit score is like a snapshot of your level of credit risk at a particular point-in-time; when your credit information changes, so does your credit score. Give yourself the credit you deserve. Pay your bills on time, pay down any outstanding debt and avoid taking on new debt or applying for too many new credit cards.

/ Financial Aid Office

Financial Aid is located in Barlow Hall, 88 Cochran Alley

p/ 614.823.1502
f/ 614-823-1588
e/ financialaid@otterbein.edu

For your protection, please do not submit personally identifiable or confidential information via email. This includes attachments with tax returns/tax return transcripts and social security numbers.

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