What are alternative loans?

alternative Loans
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What are alternative loans?

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• Private Alternative Education Loans are loans offered by lenders to student for educational expenses not covered by other federal aid. These loans are not guaranteed and generally require good credit and/or a co-signer to qualify. They are limited by the school’s defined cost of attendance. • A list of recommended private loan lenders can be found by following the links on our Apply for Loans page.

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Alternative Loans are educational loans available from private lending agencies such as banks, credit unions, and other lending institutions. Graduate students may be eligible for these Alternative Loans, many of which have varying criteria on interest rates, minimum monthly repayments, etc. However, with the recent availability of the Grad PLUS loan, alternative loans are no longer needed to fill the short-fall created by the annual Direct Loan limits. It is preferred that you apply on-line (versus paper applications) for these loans. Web sites are provided by the lenders. Information on alternative loans is available at http://www.finaid.ucsb.edu/TypesOfFinAid.asp.

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Alternative loans are private (non-federal) loans. Specific terms and eligibility requirements will vary. You (and if applicable your co-borrower) should carefully research the options and apply for the alternative loan that best suits your needs. Before applying for an alternative loan, you should complete a FAFSA to determine your federal loan eligibility. If you do decide to use an alternative, you must provide all documentation requested by the sponsor of the loan and follow its application instructions. Please see our list for alternative lenders. You are not required to use one of these lenders, but the Office of Student Financial Aid does have a working relationship with each of these lenders. If you chose another lender, then the Office of Student Financial Aid will work with your lender-choice.

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Alternative loans are private (non-federal) loans. Specific terms and eligibility requirements will vary. You (and your co-borrower, if applicable) should carefully research the options and apply for the alternative loan that best suits your needs. Keep in mind that usually your best option is to pursue federal loans. Be sure to apply for all eligible federal loans before considering a private loan. If you decide to apply for a private educational loan, you must provide all documentation requested by the sponsor of the loan and follow their application instructions. Click here for more information about private lenders.

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