Alternative Loans
Private lenders, usually banks, offer a variety of
loans, often referred to as "alternative" loans, to
graduate students. Because future Optometrists are seen
as good financial risks, banks are willing to loan money
for your educational expenses even though the loans are
not guaranteed by the federal government. These are the
most expensive loans available to graduate students.
Private alternative loans must be certified by the
Financial Aid Office. The amount borrowed must fit
within the cost of attendance established by the school.
Even though the terms and
conditions of alternative loans will vary by program, the following information
applies to all programs:
- Interest is variable (no
cap); can change quarterly
- Interest is NOT
subsidized and begins accruing upon disbursement; borrower has the option to
pay the interest during enrollment or to allow it to accrue
- Unpaid interest will be
capitalized by the lender and added to the principal of the loan
- Loan amount may be up to
cost of attendance
- Not need-based
- Student borrows directly
from a private lender
- A loan fee is deducted
from the loan proceeds before disbursement; approximately 6% to 8%
- Usually provides
deferment for residency (approximately 3 to 4 years)
- Dependent upon total
borrowed, repayment may extend up to 25 years
- Borrowers must be
credit-worthy to be approved for these loans; lenders will not approve a loan
if the borrower has a poor credit history or excessive consumer debt; the
absence of a credit history is not viewed as negative
The participants in these
programs and their terms change frequently, so it is wise to get up-to-date
information and read it carefully.
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