Study Abroad Loans - Frequently Asked Questions

What is a private education loan?

Unlike Federal Student Loans, private education loans are specialized education loans based on your credit history and income and should only be considered after all federal loans, grants and scholarships have been exhausted. Lenders typically give better terms for better credit history. Many lenders also allow cosigners which may help you qualify for better rates.

What can private education loans be used for?

Private education loans can be used for education-related expenses including such things as tuition, books, transportation and room and board.

Who can apply for a private education loan?

The student must apply for the loan. Since many students do not have extensive credit history, they may need a creditworthy cosigner to increase the chances of getting the loan.

Are there application deadlines?

No. You may apply for a private education loan at any time.

What is the application process?

After submitting your application, you will receive an immediate credit decision. Even if you are conditionally approved, you may still add a creditworthy cosigner to your loan application. You will then need to submit required documentation along with a signed promissory note. Once all paperwork is received, your loan may be disbursed in as little as 10 days.

Are there any fees?

Based on your credit history, there may be fees associated with origination, disbursement or repayment. For this loan, there are no origination fees. However, there may be a repayment finance charge. The charge can range from 4.5 to 5.5% of the original loan amount and would be assessed at the time of repayment.

What are the interest rates?

Interest rates will be based on you or a cosigner's credit history and are generally stated as an index, such as Prime or LIBOR, plus a margin.

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 soon will I receive my funds?

Private education loan funds are usually disbursed within 10 days of receiving all necessary paperwork.

Who offers private education loans?

Banks, private lenders and other financial institutions offer private education loans.

How long are repayment terms for private education loans in general?

Repayment terms typically range from 15-25 years.

Are there any deferment options?

You can typically choose to begin repaying your loan immediately, make interest only payments while you are in school, or defer all of your payments while you are in school. Any interest you defer will be capitalized (added to your balance) when you begin making your loan payments.

What should I look for in a private education loan?

Interest rates and fees can vary significantly between lenders. Many lenders also offer borrower benefits that can reduce the principal or interest on a private education loan. Be sure to look carefully at the terms and conditions when applying for a loan.

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