How To Apply for a Private Alternative Loan

Be sure private alternative loans are the right option for you. Private alternative loans should be utilized when all federal resources, such as Federal Direct Subsidized/Unsubsidized and Federal Direct PLUS Loans, have been exhausted. They are managed through private lenders, are typically issued in the student’s name, and usually require a cosigner.

Things to consider:

Don't know what questions to ask your lender? Review our recommended list .


The student’s eligibility for a loan is determined by the cost of attendance minus other financial aid or the loan maximum determined by the lender.

Before you apply

  • Apply no more than 60 days prior to the start of the semester. Applying too early may result in expiration of your credit approval and would require a new application with the lender.
  • Schedule all courses before you apply. Your loan will be certified based upon the number of courses for which you are enrolled.
  • Determine how much you will need to borrow. You can view the breakdown of your expenses vs your financial aid in your Financial Aid Offer in LionPATH for the Academic Year in which you are applying.

Explore our loan tools for more guidance:

Select a Lender

Neither Penn State nor the Office of Student Aid promotes, endorses, or recommends any loan products or lenders. You have the right to select the alternative lender of your choice. Your bank, credit union, or other financial institution can be a good place to start your search for a reputable alternative loan lender.

Eligibility, rates, terms, and conditions will vary according to lender. Some of the most common requirements are that the borrower is enrolled in a degree program and is enrolled at least half-time. The interest rate that you are offered will be dependent on your credit worthiness.

Helpful Hints

  • Take your time and compare multiple lenders and loan programs.
  • Secure a co-signer with good credit.
  • Keep a copy of your loan application and other related documentation for your own records.
  • Alternative loan applications will ask that you enter a requested loan period, or the dates for which you need a loan. Select the appropriate loan term date:

2022-23 available Loan Term Dates*

Loan PeriodDates
Fall 2022 - Spring 2023August 2022 - May 2023
Spring-only 2023January - May 2023
Summer 2023May - August 2023

2023-24 available Loan Term Dates*

Loan PeriodDates
Fall 2023 - Spring 2024August 2023 - May 2024
Spring-only 2024January - May 2024

*If you choose a fall/spring loan term period, the amount of the loan will be split equally between the two semesters.

Students who applied for a fall only loan to cover fall expenses, should choose a spring only loan when applying for a loan to cover spring expenses. The Spring application option should be available to you in mid to late November. The Summer application option should be available in mid April.

Repayment and Deferment

Deferment usually lasts from the time the money is borrowed until graduation and any specified “grace period.” During this time, interest may accrue, but the student typically does not need to make payments. Some loans will allow you to pay to accruing interest over time; these are called interest-only payments. We recommend that you make interest payments (if you are able) in order to lower the total amount that you will re-pay over the life of the loan. This will vary by lender and product, so check each loan for details.