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Private (Alternative) Loans

Private (Alternative) Loan programs are educational loans that are available through private lenders.  They are not part of the federal government loan progra and are intended to supplement traditional financial aid programs.  These loans require a student to be credit-worthy or have a credit-worthy co-signer. Terms, interest rates and fees vary by lender.  Students are encouraged to research various alternative loan options and select the one that best fits their circumstances.  Applications may need to be requested from the lender, but most are available for students to fill out online.

Before considering or applying for an alternative loan, Financial Aid & Scholarships strongly encourages you to apply for federal aid by completing the Free Application for Federal Student Aid (FAFSA)
(http://fafsa.ed.gov ).  Federal student loans often provide better interest rates, terms and flexibility in repayment compared to alternative loans.

You are free to select any private lender offering alternative loans. While UTSA does not recommend any specific lenders for alternative loans we do recommend you compare loans from several lenders to find the best interest rate, terms and repayment options for your situation.

Important Changes Effective February 14, 2010

Students pursuing education loans through a private lender are subject to federal guidelines. The guidelines require lending institutions to provide to the borrower three additional disclosures regarding their loan application, approval, and acceptance status.  The purpose of these disclosures is to:

  • Present the terms, conditions and costs of the loan
  • Promote informed borrowing comparisons between lending institutions
  • Present federal options  that may be available through at a lower cost the Free Application for Federal Student Aid (FAFSA)

How These Changes will affect school Certification and Disbursement

Borrowers may notice longer processing times for our office to certify their approved alternative loan application. This delay is because the lender is now required to give the borrower 30 days to accept the terms and conditions of the loan, as outlined in the approval disclosure.

Students are required to submit a Private Education Loan Applicant Self-Certification form to their lender. This form can be obtained from your lender. No funds will be disbursed until this form is returned to the lender.  Information regarding the total cost of attendance at UTSA can be found at http://www.utsa.edu/financialaid/apply/cost.html

There is a delay in the turnaround time for  disbursement to allow for a  ‘Right to Cancel' period.  The Right to Cancel' period, listed on the Final Disclosure form, gives the borrower a deadline to notify the lender if they would like to cancel their loan application.  Loan funds cannot be released to UTSA until after this date has passed.

If you have specific questions regarding your alternative loan disbursement, please contact your lender to first verify that your loan application file is complete.

Click on the links below for Alternative Loan Frequently Asked Questions:

Who can apply?
What are the requirements to receive an alternative loan?
How do I complete an alternative loan application?
How does the alternative loan affect my financial aid?
What is the interest rate/origination fee for an alternative loan?
What is the alternative loan repayment period?
What is the processing time on certifying an alternative loan?
What type of information will the lender review to determine my credit worthiness?
What is credit history?
What is a FICO score and who uses it?
What should I do if I don't have a strong credit score?


Who can apply?

Any student currently enrolled at UTSA for the term they are requesting the loan.


What are the requirements to receive an alternative loan?

  • Some lenders require that a student needs to be at least half-time per semester and for others the minimum requirement needs to be enrolled for three credit hours.
  • Some lenders require the student to be pursuing a degree.
  • Some lenders require that a student needs to be making Satisfactory Academic Progress (SAP) during the semester.
  • It is the student's responsibility to make sure they know what criteria pertains to the loan.

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How do I complete an alternative loan application?

You must choose the lender you want and complete the alternative loan approval and application process.

Once your lender of choice has received all the required documentation and approved your loan, they will notify the Financial Aid & Scholarships office by sending a pending school certification online, fax or by mail.

Some lenders are unable to notify schools electronically and will send the pending certification form directly to the student. Students are required to submit the paperwork to Financial Aid & Scholarships with the proper address and phone number of the lender attached.

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How does the Alternative Loan affect my financial aid?

Students can generally borrow the difference between the university's cost of attendance minus the student's other financial assistance.

Filing the FAFSA is not a prerequisite for borrowing an Alternative Loan, but students are encouraged to complete a FAFSA, so they can be considered for the maximum aid they may be eligible for.

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What is the interest rate/origination fee for an Alternative Loan?

Loan terms, interest rates, and fees vary by lender.

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What is the Alternative loan repayment period?

All information about repayment will be discussed by your lender of choice when you begin the process of pursuing an Alternative Loan.

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What is the processing time on certifying an Alternative Loan?

There is a 5-7 business day processing time for all alternative loans, once UTSA receives the pending school certification from your lender. During peak season times there is a delay in addition to our normal 5-7 business days of processing time.

  • Any holds or issues affecting your financial aid will delay the processing of your loan.
  • Any pending certifications that are incomplete will delay the processing of your loan.
  • Students pursuing an alternative loan with no FAFSA on file will have a delayed processing time outside of our regular 5-7 business day processing time.

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What type of information will the lender review to determine my credit worthiness?

Lenders will review your credit history to determine if you are likely to repay your debt. They look at your payment history, amounts owed, length of credit history, any new credit you have applied for, and types of credit used.
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What is credit history?

It is a record of how you repay your debts. Information from your credit history is gathered and kept in a credit report.  The information in your credit report is compiled and given a credit score.  The most common credit score used by lenders is the FICO (Fair Issac Corporation) score. You are entitled to one free copy of your credit report per year at www.annualcreditreport.com.  Although they charge a fee, students can also receive their credit reports from each of the three major credit bureaus: www.equifax.com, www.experian.com, www.transunion.com.  Also for a, students you can obtain a copy at www.myfico.com.

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What is a FICO score?

A numerical FICO score is assigned to your debt obligations based on how you repay.  FICO scores can range from 300-850.  A Higher FICO score means a lender is more than likely to approve your loan application, because you have demonstrated responsible and on-time repayment habits for your debts.  An average FICO score is 678. The FICO score is used by all three major credit bureaus that provide credit reports: Equifax, Experian, and TransUnion.  We recommend reviewing your credit report before you apply for credit or a loan. If you have a credit score that is at or below the average FICO score of 678 then a lender may consider you high risk, and could deny your application.  Too many credit inquiries can lower your credit score. On average a credit score is lowered about 5-7 points per inquiry.  By reviewing your credit report first, it can help prevent damaging your credit score further.

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What should I do if I don't have a strong credit score?

Apply with a co-borrower that has a strong credit score.  This increases the likelihood that your loan application will be approved.     

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