Private Educational Loan Information

What is a Private Student Loan?

Private loans are unsecured educational loans made by private financial institutions such as a banks or credit unions. These are loans that must be repaid with interest.

  • Interest rates, origination and repayment fees for this loan program are based on the credit-worthiness of the borrower and/or co-borrower.
  • Undergraduates will generally need to apply with a credit-worthy co-borrower. Graduate students may obtain better rates by applying with a credit-worthy co-borrower.
  • Interest rates will vary on a monthly or quarterly basis and may not have a maximum rate.
  • Repayment generally begins immediately after full disbursement.
  • Some lenders may defer (postpone) repayment during periods of at least half-time enrollment and economic hardship; however, interest will accrue on the loan from the date it is disbursed.
  • To reduce the cost of borrowing, consider making in-school interest or interest + principal payments.
  • Rules for repayment and deferment vary from lender to lender. Check with your lender for more information.

To apply for a private loan, please read the following information carefully and then click on the links to the USD Lender lists.  You will apply for your loan directly with the lender you choose. You have the right to use any lender you wish and do not need to select one from the USD Lender lists.

Exhaust Federal Student Aid Options First

Students who are eligible for federal student aid should complete the FAFSA and exhaust all federal, state, and University aid options, including federal loans, before applying for a private loan. Federal student loans generally have more favorable terms and conditions than private loans. We recommend that you utilize all federal loan eligibility before turning to private loans.

Plan Ahead

Recent amendments to the Truth in Lending Act (TILA) require that you complete a self-certification form and submit it to your lender for each private loan you apply for after February 14, 2010. If your lender does not provide you with the form, print the Private Loan Self-Certification form and access your Financial Aid Award from the MySanDiego web portal to obtain your cost of attendance and your estimated financial assistance for the period of enrollment covered by the loan. Return the self-certification form to your lender upon completion. If you have not applied for federal aid, please refer to the USD Student Accounts web page for cost information. TILA also requires lenders to provide you with three disclosures: 1) upon your application, 2) when you are approved, and 3) at least 3 days prior to disbursement. Timing of the last disclosure may delay loan disbursements by an additional 1-2 weeks. Please plan accordingly.

 

USD's Historical Private Lender List

FastChoice Through the FastChoice electronic list you can review possible lenders, their benefits and application processes.

Follow Important Guidelines:

  • Apply for your private loan within 90 days of the beginning of the semester so your lender’s credit does not expire.
  • Schedule ALL of the courses you plan to take BEFORE you apply for your loan so your loan is certified for the correct amount. Increases may not be possible after the loan is certified.
  • For summer session(s), you must complete a separate loan application, since it is a separate loan term.

A private loan is an agreement between the borrower and cosigner and the lender. The University of San Diego cannot in any way be held liable in the event the borrower is dissatisfied with the rates, terms, or service provided by any lender, nor is USD responsible for any damages incurred by the student as a result of the student's choice of lender.

You have the right to select the private lender of your choice.

Do Your Research

Ask Questions of your lender.

Borrow only what you absolutely need.

Calculate your estimated monthly payment and total repayment amount.

 

Comparing the Federal PLUS and Private Alternative Loans

Federal Direct PLUS Loan (Graduate/Professional Student or Parent of Dependent Student) Alternative Loan
Loan Terms and Conditions
Fixed interest rate of 5.30%. Fixed and variable interest rate --monthly or quarterly -- ranges from 2.25% to 13.74%
Delayed repayment options offered (annual application prior to repayment required). Payments may be deferred while student is enrolled at least half-time.
Parent/borrower may borrow up to the cost of attendance less other aid. Student (typically with a co-signer) may borrow up to the cost of attendance less other aid.

Credit check based on federal standards--no debt-to-income ratios or credit-scoring.

A parent/borrower may have a better chance of being approved as a borrower on a Direct PLUS Loan than as a co-signer on a private alternative loan.

Borrowers must pass a comprehensive credit review process.
Eligible for forgiveness programs  
Current Loan Origination fee: 4.236% - on or after 10/1/19 and before 10/1/2020  

 

Repayment
Borrower is responsible for repayment. Student is responsible for repayment. However, a co-signer is typically required and equally liable.
Accrued interest capitalizes once at final repayment. Accrued interest may be capitalized monthly, quarterly, or once at repayment.
Federally insured against death and disability for both the parent and student. Check with the lender as some are now allowing cancellation due to death of a borrower.
Opportunities available to consolidate PLUS Loans Limited consolidation options, must check with your lender

Important: We strongly recommend that you research answers to the following questions before applying for an alternative educational loan or signing any loan paperwork.

Eligibility:

  • What are the minimum and maximum loan amounts available?
  • Will this loan meet my long-term educational borrowing needs as well as my immediate short-term needs?
  • How will my credit rating affect my loan?
  • Is a cosigner required? If so, under what conditions?
  • Is there an option to release the cosigner at a later date?

Interest Rates and Fees:

  • Does the spread/margin over the interest rate fluctuate?
  • Is there an interest rate cap?
  • What is the current interest rate?
  • What additional fees, interest reductions, or other incentives are offered during the life of the loan? If any, do these conditions vary based on credit rating, academic level, or availability of a cosigner?
  • When are late charges assessed, and how much are these charges?
  • How is my loan capitalized--annually or only at repayment?

Repayment Terms and Conditions:

  • What are the minimum and maximum terms and payment amounts?
  • When do payments begin?
  • Can interest only payments be made while still in school?
  • Is there a penalty for paying off the loan early?
  • Does the lender offer combined billing of alternative and federal loans?
  • Are grace periods, deferments, or forbearance offered? If so, what are the conditions and how is interest capitalized during these periods?

Borrower Benefits:

  • Does the lender offer any other borrower benefits? If so, what are the eligibility requirements?
  • If a borrower does not qualify for a benefit, what is the appeal process?

Service:

  • What is the turnaround time for credit decisions and disbursement of funds?
  • How are problems resolved? Does problem resolution occur in person, by phone, online, or another method?
  • Is there access to loan information through the Web?
  • What is the lender's policy on selling loans to other lenders after the loan has been disbursed?