Private (Alternative) Loan FAQ


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 LMU 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.


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 and their co-signer.


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 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).


When do I pay the loan back?

Rules for repayment vary from lender to lender. Some lenders may defer repayment during periods of enrollment, but it is best to verify repayment terms directly with your lender. Please note that private loans are not eligible for Federal Direct Consolidation, Federal Income-Based Repayment plans, or Federal Economic Hardship Deferments.


How to Apply for an Alternative (Private) Loan

Please Note: The Financial Aid Office encourages all students to exhaust all university, state and federal financial aid programs prior to applying for a private loan. The terms and conditions of loans under these programs may be more favorable than those of private education loans. Information on federal and state aid programs, as well as how to apply, is available here.

All loan borrowers at LMU are required to complete the Free Application for Federal Student Aid (FAFSA). Although you may be approved by your lender to borrow an alternative (private) loan before submitting a FAFSA, LMU will not certify or disburse any loan funds until a FAFSA is completed.

Select a lender from those provided on ELM Select or choose your own and complete that lender’s application process.

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.

Students are required to meet with a financial aid counselor for a loan entrance counseling session prior to receiving an alternative loan. Alternative Loan Counseling is an opportunity for the student borrower and the counselor to ensure that all forms of federal assistance have been considered, as well as to gather information about the terms and conditions of your private loan. Alternative Loan Counseling helps promote responsible borrowing among students considering private financing options. Please contact our office in-person or by phone during business hours to complete the counseling. Appointments are not required. Please Note: LMU will not certify your private loan with your lender until Alternative Loan Counseling is complete. The counseling session will post as a “missing requirement” on your PROWL account as soon as we are notified by your private lender that your loan has been approved. Therefore, students in the process of applying for an alternative loan are encouraged to monitor their PROWL account closely for updates.