Private Alternative Loans: How to Plan, Decide, and Apply

Private alternative loans are managed through private lenders, issued in the student’s name, and require a co-signer. Eligibility, rates, terms, and conditions vary.

Private alternative loans are managed through private lenders, issued in the student’s name, and require a co-signer. Eligibility, rates, terms, and conditions vary. Approval and interest rates are based on the borrower’s and co-signer’s credit ratings. Alternative loans are agreements between the borrower, co-signer, and the lender.

Plan ahead

The Truth in Lending Act (TILA) requires you to complete and submit a self-certification form to all lenders for each individual application.

The terms and conditions of federal student aid may be more favorable than the provisions of private alternative loans.

If your lender does not provide the form, print and complete the Private Education Loan Applicant Self-Certification. You can find your cost of attendance and estimated aid for the period of enrollment covered by the loan on your Student Aid Summary on eLion. Return the self-certification form to your lender.

TILA also requires lenders provide you with three disclosures:

upon your application
when you are approved
at least three days prior to disbursement

Timing of the last disclosure may delay loan disbursements by an additional one to two weeks so plan accordingly.

Penn State cannot in any way be held liable in the event the borrower is dissatisfied with the rates, terms, or service provided by any lender.

Make informed decisions

Be sure private alternative loans are the right option for you.

Calculate your estimated monthly payment and total repayment amount
Review your Loan Debt Summary on eLion for current loan obligations
Budget wisely and borrow only what you need
Compare private alternative loan terms
Compare private alternative loans with the Parent PLUS Loan
If you are a veteran, please see our veteran information
Ask questions

How to apply

Apply within 90 days of the start of the semester. Schedule all courses before you apply. Increases may not be possible after the loan is certified.

2012-13 Loan Term Dates

Fall/Spring: August 2012 – May 2013

Spring only: January – May 2013

Summer only: May – August 2013

Lenders

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

The following is a list of lenders with whom Penn State students have conducted business in the past three to five years. Neither Penn State nor the Office of Student Aid promotes, endorses, or recommends any of these loan products or lenders.

AMS Smart Option Loan by Sallie Mae

Degree and non-degree students
Can be enrolled less than half-time

Charter One TruFit Student Loan

Degree students only
Must be enrolled at least half-time

Citizens Bank Trufit Student Loan

Degree students only
Must be enrolled at least half-time

cuScholar Private Student Loan by cuStudentloans

(also lists participating credit unions)

Degree students only
Must be enrolled at least half-time
Must be making satisfactory academic progress

Credit Union Student Choice

(lists participating credit unions)

Degree students only
Must be enrolled at least half-time
Must be making satisfactory academic progress

Discover Student Loans

Degree students only
Must be enrolled at least half-time
Must be making satisfactory academic progress

FifthThird Bank Smart Option Loan

Degree and non-degree students
Can be enrolled less than half-time

Nellie Mae Smart Option Loan by Sallie Mae

Degree and non-degree students
Can be enrolled less than half-time

Penn East Federal Credit Union

Degree students only
Can be enrolled less than half-time

PNC Solution Loan

Degree students only
Must be enrolled at least half-time

Regions Bank Smart Option Loan by Sallie Mae

Degree and non-degree students
Can be enrolled less than half-time

Sallie Mae Smart Option Loan

Degree and non-degree students
Can be enrolled less than half-time

Sun Trust Custom Choice Loan

Degree students only
Must be enrolled at least half-time

Wells Fargo Collegiate Loan

Degree students only
Can be enrolled less than half-time

If you are denied a loan, you and your co-signer can contact the lender and request an Adverse Action Credit Letter to determine why. You should also request a copy of your credit report to review your credit information.

Many alternative lenders will approve a loan for international students who have a creditworthy U.S. citizen or permanent resident as a co-signer. Contact the lender of your choice to determine if you are eligible.

Loans offered by state agencies

Your state may offer a loan program to its residents through your home state higher education agency. Be aware that many of these programs have limited funds and repayment options. The following list is not exhaustive.