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The following is a list of criteria that should be used when selecting a lender:
1) Interest Rates: Interest rates charged during loan repayment;
2) Fees: The percent of fees, if any, charged to borrow an alternative loan;
3) Approval Rate: The relative approval rates of loan applicants;
4) Co-Signer Release: Whether or not a co-signer can be released from repayment responsibilities after a certain number of repayments;
5) Customer Service
THINGS TO CONSIDER BEFORE BORROWING AN ALTERNATIVE LOAN:
- Alternative loans are designed to help students with educational expenses after all federal, state, and institutional aid has been received.
- Students are responsible for all interest charges.
- Most alternative loans will require a creditworthy co-signer.
- Alternative loans have higher interest rates than federal loans. For the current prime and LIBOR rates, go to www.bankrate.com/brm/ratehm.asp
- Interest rates change often and have no cap.
- Alternative loans cannot be included in a federal consolidation loan.
- Each time you apply your credit is reviewed.
- If you plan to attend graduate school, check with your lender to determine if your loan can be deferred.
APPLICATION TIPS
When completing the application, you will be asked to supply a loan period. Common loan periods for the 2009-2010 aid year include:
- August 2009 to May 2010 for the full year;
- Auguest 2009 to December 2009 for fall 2009 only;
- January 2010 to May 2010 for spring 2010 only;
- May 2010 to August 2010 for summer 2010 only;
Note, summer term always requires a separate application.
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