Private loans
Private loans come from banks, credit unions, or other lenders, not the federal government, and should be considered only after you’ve explored all other financial aid options. They often have higher interest rates and fewer repayment benefits than federal loans. If you do decide to borrow privately, make sure to compare lenders and understand the terms before signing anything.
Additional funding to pay for your education
Private loans are loans offered by banks or financial institutions (rather than by the federal government). Generally, private loans have higher interest rates and are less flexible terms than federal direct loans. We recommend exhausting all federal direct loan options before turning to private loans.
What to know before applying for a private loan
- Exhaust all other possible sources of financial aid first.
- Look for ways to reduce your expenses before you decide how much to borrow
- Borrow only what you absolutely need
- Ask questions and compare the rates and terms offered by different lenders
Key factors to compare before you borrow
In addition, research the following aspects of each loan carefully before committing:
- Interest rate: Check the interest rate carefully and understand it can fluctuate from month to month, affecting your monthly payment amount.
- Loan fees: Lenders might charge “hidden” fees such as origination fees, service fees, and late fees.
- Eligibility: In general, private student loans have stricter eligibility requirements. Lenders might require a good credit score and a co-signer. If you are an international student, you will be required to have a credit-worthy United States citizen as a co-signer to obtain a private education loan.
- Loan amounts: The maximum you can apply for is your cost of attendance minus any other financial aid you might receive.
How to apply for a private loan
When you apply for a private loan, you’ll apply directly through the lender. To find and compare lenders and loans, we recommend two tools:
ELM Select
ELM Select provides data of which lenders students in the US have been using over the past five years. It shows data about each lender, such as rates and repayment processes, so you can compare and contrast. ELM Select is also a tool that helps manage and expedite applications and disbursements for private loans. When choosing a lender, it might be helpful to ask if they are compatible with ELM.
Sparrow
On Sparrow, you can search for and compare real, personalized private student loan rates by filling out a simple form. Sparrow provides tools and information displays that make student loan comparison easy, digestible, and visual.
Please note: NAU does not have an agreement or partnership with either of these tools or any particular lender, nor do we recommend or require any particular private lender. Do your research on lenders and loan options before choosing the one that is right for you.
Additional information on private student loans
Loan certification
NAU cannot certify private education loans that overlap multiple academic years or terms. If we receive a request to certify a private loan that overlaps multiple terms and/or academic years, we will place your private loan certification request on hold.
NAU reviews your lender’s required qualifications (SAP, enrollment, etc.) before certifying your loan. You must understand and meet your lender’s requirements.
Loan disbursement
If your loan is certified for both the fall and spring semesters, the first half of your funds will disburse in the fall semester. The second half will disburse in the spring semester.
If your loan is certified for a single term, your private education loan will be released in one disbursement.
Federal regulations require all lenders of private education loans to provide borrowers three business days from the time you receive the Loan Consummation Disclosure Statement to change your mind and cancel your private education loan.
Your private education loan will disburse within 10 business days from the date you receive the Loan Consummation Disclosure Statement. Lenders and schools are prohibited by federal regulations from disbursing funds until the cancellation period has passed.
Single loan terms
Request for a single-term loan will be certified up to the cost of attendance, less any other awarded financial aid for the term.
Private loan disclosure
An NAU student may apply for a loan through a private lender to meet educational expenses. Private education loans are available only to enrolled students and are designed to fill the gap between other financial assistance received and the annual cost of attendance.
Northern Arizona University does not have a preferred lender list. Look for interest rates and repayment plans that meet your needs, and keep in mind that many of these loans don’t offer flexible repayment plans or consolidation options. With some lenders, adding a qualified co-signer can help you receive a better interest rate.
We encourage you to borrow federal student loans first before considering a private alternative loan. Visit Federal Student Aid to learn more about the difference between federal and private loans.
The amount that you or your cosigner can borrow depends on individual financial circumstances. Other variables include NAU’s cost of attendance, financial aid resources, and loan limits imposed by the lender. Your alternative loan and other financial aid cannot exceed your cost of attendance.
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