Private Loan Lenders

Federal student loans are available to any student who completes a FAFSA and meets general eligibility requirements, which includes remaining under federal loan limits, not defaulting on federal loans, and meeting Satisfactory Academic Progress (SAP).  The terms and conditions of federal student loans are standard across the nation for student borrowers. 

In contrast, private loans require a borrower to apply through a private lender and meet that lender’s eligibility requirements.  Terms, conditions, and eligibility requirements will vary from lender to lender, borrower to borrower.

To apply and qualify for a private student loan, interested borrowers must complete an application with the lender.  This can most commonly be done through the lender’s website, but some lenders may also have mobile apps or other means to apply.  Links to lenders websites are available through the ELM website.

Lenders will perform a credit check to determine if you qualify and what interest rates and conditions you may be eligible for.  Once a lender has approved a student for a loan, they will send a certification request to KU for us to verify the student’s academic status. Some lenders may require specific GPAs or half time enrollment status to be eligible for the loan. 

Check with the lenders to see what their requirements are and contact your financial aid counselor if you have any questions about your academic status at KU.

There are a couple of things to consider when it comes to determining how much you can borrow in private loans.  First, each lender may limit how much you can borrow based on your credit score and financial situation. 

Additionally, KU limits private loans to a student’s cost of attendance (COA) minus other financial aid (OFA).  For example, although a lender may initially approve you for $30,000, if your COA minus OFA is only $20,000, then KU can only certify the private loan for $20,000, per federal regulations.  

If you are concerned about KU limiting the amount of your private loan, please contact your financial aid counselor to see how much you can receive.

It is up to the borrower to determine which lender is best suited for them. However, there are some common things to keep in mind when reviewing and selecting a private lender:

Credit score – a credit score is a number that lenders use to determine how safe it is to lend to you.  Higher credit scores will usually result in lower interest rates and higher borrowing limits.  For students with low or no credit, a co-signer may be required to receive a private loan.

Co-signer – a co-signer is another individual who will be responsible for the loan if you are unable to make payments.  A co-signer with a good credit score can help reduce interest rates. Some lenders may offer options to release a co-signer from a loan after certain requirements are met.

Interest rates – interest rates are how much the original amount of the loan increases over a period of time.  Higher interest rates will typically result in higher monthly payments and a larger total amount of money required to pay off the loan.

Fixed Interest Rates – fixed interest rates will not change over time.  The loan amount will increase in a standard predictable manner over the life of the loan.

Variable Interest Rates – variable interest rates are subject to change over time. Depending on how the variable rate is calculated, a loan may end up costing much more or less than originally estimated.

APR – the annual percentage rate uses interest rates and other fees to calculate how much it will cost per year to pay off the loan.

Repayment options – most lenders will offer a variety of repayment options, but these usually have to be selected at the time of application.

Grace period – most lenders will offer grace periods after you leave school to give you time to find a job and get settled before making payments. The availability and length of these grace periods will vary from lender to lender.

Deferment – most lenders will allow borrowers to defer making payments while they are in school.  The options and eligibility requirements will vary from lender to lender.

Fees – some lenders may charge fees to process or originate the loan, which could result in higher repayment amounts.  Check a lender’s terms and conditions to determine if any extra fees are tied to the loan.

SAP – some lenders require students to meet Satisfactory Academic Progress (SAP).  KU checks SAP status at the end of each semester and notifies students if they are not meeting SAP.  Talk to your financial aid counselor if you have questions or concerns about your SAP status.  Check with a lender about SAP requirements before applying.

Enrollment Status – some lenders will require student be enrolled in a certain number of hours to receive a loan for a semester.  Check with the lender to see what enrollment status they may require before applying.

Past Due Balance – some lenders will cover charges from a previous term and others will not.  Check with the lender before applying.

KU has a preferred lender list to make the process of finding a private student loan easier for the student.  KU does not receive any benefits in return for including a lender on the list.  The lenders have been chosen based on how well they suit KU students in general.  KU will certify loans from any lender you choose.