Financial Aid Links

Alternative Private Loan Programs

Many private lending institutions offer credit-based loan programs to students. Students should carefully consider the interest rates, loan fees and terms of the program before making a selection. Most institutions have an online application followed by a credit check. Once the school is notified, the school will certify the loan amount. The student most likely will then be required to complete either an online or paper promissory note. Some lenders may require a credit-worthy co-signer who is a U.S. citizen. Below is some information to consider before selecting a private loan.

How to Apply for Alternative Private Loans

Please be aware that private loans do not qualify for most loan repayment assistance programs, nor do they qualify for most loan forgiveness programs. UVA Law requires that all students seeking a private loan complete a loan counseling session with the financial aid office. 

Important Terms and Definitions

Know Your Score — Most private loans are based on the creditworthiness of the borrower and/or co-signer. Students need to know their credit score.  For some lenders, a higher credit score, or applying with a co-signer, will result in a lower loan interest rate.  Students can get a free copy of their credit report at

LIBOR — London Interbank Offered Rate. The interest rate on some private loans is based on the LIBOR three-month rate or the LIBOR one-month rate. The interest rate for the loan is probably variable and will change based on the rate.

Prepayment Fee — Make sure the private loan does not have a prepayment fee for early repayment.

Deferment — Some private educational loans offer a deferred payment option. If loan payments are deferred, interest will accrue. Our recommendation is to pay the interest if at all possible so that your principal will not increase. Some interest rates for deferment may be different than the repayment interest rate.

Repayment Fee — A few lenders actually charge a fee for going into repayment.  Shop around to avoid this fee.

Late Payment — Find out from the lender at what point a payment will be considered late.

Credit-Worthy Borrower — A borrower or co-signer who has sufficient credit to borrow or co-sign for a loan and who is a U.S. citizen.

Credit-Ready Borrower — A borrower who does not have any credit history but is ready to establish credit.

Repayment — Read the terms and conditions of your loan as some plans require immediate repayment while others provide terms for deferment.