What is a Private Loan?
Private loans are offered by many lending institutions and are designed to help students and their families with paying education expenses. These loans can typically cover 100% of the remaining educational expenses (gap) after all other financial aid has been applied (including Federal Work Study). A credit check is required and undergraduate students most often need a credit worthy cosigner for approval. R-MC recommends you complete the Free Application for Federal Student Aid (FAFSA) first to determine eligibility for federal student loans before applying with private lenders. Parents also have the option of borrowing from the Federal Direct PLUS program to help with education expenses. A comparison between the PLUS and Private loans can be accessed here.
How do I Apply?
Private loan applications are completed directly with the lender of bank of your choice. Many lenders offer online applications which can speed up the approval and processing time. R-MC has chosen not to participate in a preferred lender agreement and cannot recommend a specific bank or lender. For your convenience, we have compiled a list showing all of the lenders our students have used within the last three years. You may access this historical list here.
I’ve Been Approved for a Private Loan, What’s Next?
Once you’ve been approved by a lender, and have completed all of the necessary paperwork associated with your loan, R-MC will receive a certification request from your lender. The purpose of a certification request is for R-MC to certify your enrollment (or intent to enroll), to verify you are eligible for the amount you’ve request and to set the appropriate disbursement dates. Our office will process your loan in a timely matter, but during peak season (June-August), please allow at least two weeks.
Please note that due to federal regulations, your lender must hold your loan disbursement for a minimum of 3 business days for a recession period. Please consider this when applying for a private loan and allow enough processing time.
What kind of questions should I ask my lender when applying?
We have compiled the following list of questions to use as a guide when requesting a private loan. Make sure you know the terms and requirements before you agree to any loan.
- Am I required to be in good academic standing to qualify for the loan?
- Is the lender offering fixed, or variable interest rates?
- Are there any loan fees associated with my loan?
- Are there any interest rate rebates or discounts available?
- What will my monthly payment be after graduation?
- Is there a grace period after graduation?
- What are the repayment terms?
- What repayment options are available to me?
- Is deferment or forbearance an option if needed?
- Can the loan be forgiven and under what circumstances?