Private (Alternative) Loans
What is an Alternative Loan?
This loan is a private loan in the student's name. A creditworthy co-signer is highly recommended to keep the loan fees and interest rate to a minimum. The student and co-borrower must be U.S. Citizen or Permanent Resident. International students are welcome to apply for this loan; however a creditworthy U.S. Citizen or Permanent Resident cosigner is required.
Although most lenders provide these loans based on at least half-time enrollment, there are a few lenders who will provide this loan to students enrolled less than half-time.
How much am I eligible to apply for?
You may borrow up to the cost of education minus any other financial aid received. However some lenders have a limit to the amount that you can borrow to help with loan indebtedness.
When will I receive the money?
In general, alternative loan funds will be disbursed electronically to your student account, equally over the terms of enrollment (50% in the fall semester and 50% in the spring semester). Click here for additional disbursement information and important loan disclosures.
What is the interest rate on this loan?
The interest rate on this loan varies by lender and can depend on the creditworthiness of the student. We encourage all alternative loan applicants to apply with a co-signer to receive the best interest rate possible.
What is a co-signer?
A co-signer is an individual who promises to repay the loan if the student borrower fails to do so. Here are a few tips to keep in mind when requesting a co-signer:
· Review the reasons for needing the loan with your potential co-signer.
· Make sure that your potential co-signer understands what is expected of him/her.
· Discuss when payments will begin.
· Complete the loan application together.
When do I pay the loan back?
Repayment on this loan will begin after you graduate or cease be enrolled at least half-time. Typically, you have 10 years to pay the loan back. There is no prepayment penalty so you can pay the loan pay earlier if you wish.
Attention: Undergraduate Students!
We encourage all undergraduates to have their parents apply for a PLUS loan first with the Alternative loan as a loan of last resort. The Federal Direct Parent PLUS Loan is a low interest loan that can be used to pay for the total cost of education less any other aid received. Approval is dependent on the parent borrower's creditworthiness. The interest Rate is a fixed rate of 7.9% and the interest is tax deductible. This loan can be deferred while the student is in school and with no prepayment penalty. Unlike an Private (Alternative) Loan, this loan is eligible for federal consolidation. The parent may also be eligible with repayment assistance through deferments and forbearance.
To learn more and apply click here on Federal Parent (PLUS) Loan.
How to Apply for an Alternative (Private) Loan:
1. Select a lender and complete that lender’s application process. Please note that LMU will not be notified of your lender's credit decision until you complete the application process, including the federally mandated 'change of heart' period. This process takes an average of 14 business days.
2. Students are required to meet with a financial aid counselor for a loan entrance counseling session prior to receiving an alternative loan. You may visit the Financial Aid Office during business hours to complete the alternative loan entrance counseling, or contact the Financial Aid Office at finaid@lmu.edu to schedule an appointment.