Alternative Loans
An Alternative (Private) Education Loan can help bridge the gap between the total cost of your education and the amount you are eligible to borrow through federal aid programs.
Eligibility for alternative student loans is typically based on your credit history and credit score.
To ensure timely processing, your loan application must be submitted and ready to be certified before it can be processed. We strongly recommend completing and securing an approved application by the published deadline to avoid delays in billing and payment.
If any changes need to be made to your loan, please complete the Alternative Loan Change Form in desu.studentforms.com.
Please note that processing may take up to 10 business days from the date a loan is ready to be certified, regardless of the type of request.
Reasons to Apply For an Alternative Loan
Due to the overall cost of college, some students choose to apply for an alternative (private) loan when grants, scholarships, and federal loans are not enough to cover their total expenses. You may be asking yourself, “Is an alternative loan the best option for me?” When considering any alternative loan, remember the old adage: “Let the buyer beware.”
Although alternative loans can appear more attractive than Federal Direct Stafford Loans — offering perks such as no FAFSA requirement, no upfront fees, and no payments until after graduation — they can carry much higher interest rates.
Keep in mind that a subsidized Federal Direct Stafford Loan carries a fixed interest rate of around 8.94%, while a private loan can exceed 20%, and may have variable rates that increase over time.
When determining how to finance your education, consider all available financial aid options first. Use Alternative (Private) Loans only as a last resort.
Before borrowing privately, make sure you have explored:
- Federal and state grants
- Scholarships
- Work-study opportunities
- Federal student loans (Subsidized and Unsubsidized)
Research Before You Borrow
Do your homework!
Visit lender websites, call their servicing departments, and understand the terms and conditions before signing any agreement. Remember, you may be repaying these loans for up to 20 years, and interest begins accruing as soon as the loan is disbursed.
Compare repayment incentives carefully. Some lenders may offer:
- 0.25% rate reduction for paperless billing
- 0.25% rate reduction for automatic payments
- 0.50% rate reduction with a creditworthy co-signer
- 0.50% rate reduction upon graduation
Know the Costs Up Front
Always read your Truth in Lending Statement and Private Loan Self-Certification Form carefully. These documents explain how much you will actually pay in interest over time. For example, borrowing $20,000 could result in a total repayment of more than $34,000 once interest is included.
While today’s economy presents challenges, remember — you have options. Take the time to make informed decisions about borrowing, and always exhaust all other forms of financial aid before turning to private loans.
Which lenders offer Alternative Loans? Alternative Loan Spreadsheet - Delaware State University does not endorse any of these lenders or their products. We strongly suggest you do your own research to find the loan that is best for you.