Private Loans

Many lenders offer private educational loans to student and parent borrowers. All these loans require credit checks, and the interest rates vary based on applicants’ credit ratings. Most private lenders offer lower interest rates than personal loans and credit cards.

Consider Federal Loans First

Before applying for private loans, apply for federal aid and explore your federal student loan options. For most borrowers, Federal Subsidized and Unsubsidized Student loans offer lower interest rates and overall financing costs. For students who complete the FAFSA as dependent students, your parents can apply for Federal Parent PLUS Loans. If you or your parents have excellent credit ratings, you should carefully compare the federal and private loan terms, because some private lenders offer better rates to applicants with great credit ratings.

If you find that Federal Parent PLUS Loans offer you better rates/terms than private loans, but you want to borrow more than the new annual ($20,000) and aggregate ($65,000) PLUS limits for new borrowers, you could apply for a combination of PLUS and private loans.

Choosing a Private Loan Lender

Many different lenders offer private student loans, and you must choose your own lender.

Because most lenders charge different interest rates based on each applicant's credit scores, to compare rates, you need to find what rate they will offer you. Most lenders will tell your interest rate with a short application and a soft credit check that won’t affect your credit score. 

We recommend using Credible to research private loan options. They are a private loan comparison service that allows you to compare your estimated interest rates from ten lenders with one application and one soft credit check. To limit Credible's large results lists, choose fixed or variable interest rates and filter for a single loan term length (5, 7, 10, 12, 15, or 20 years).

Fixed interest rates are safer. Variable rates are riskier because your rate could increase or decrease based on future interest rate trends.

You can also search the lenders on our ELM lender list. ELM provides a free and secure online platform for researching and comparing private loans. They list a broad range of interest rates for each lender, and you must complete a short application with a soft credit check with each lender to see your estimated rate from that lender. This ELM list includes the lenders most frequently used by TU students in the past year that electronically disburse their loans through ELM. TU has not reviewed the terms and conditions of the loans offered by the lenders listed in ELM Select and does not endorse any one of them.

These recommendations are provided solely for informational purposes. TU does not have any financial relationships with Credible or ELM, but their services could help you compare rates. Please carefully read Credible's, and ELM's terms and conditions, and the terms and conditions of all lenders you consider.

With all borrowing, you must carefully consider the loan terms before borrowing. Some of the questions you should ask include:

  • How much may I borrow?
  • What are the fees associated with the loan?
  • What is the interest rate on the loan?
  • How is the interest rate calculated?
  • What are the terms of repayment?
  • How much will my payments be if I borrow $##,###?
  • Do I need a co-signer?

Applying for Private Loans

  • Apply directly through the private lender. 
  • They will evaluate your credit history. 
  • Usually, they will also send an electronic request to our aid office to confirm your enrollment, cost of attendance and other information before they approve the loan. This certification process can take up to two weeks to complete.
  • After certification, the lender must hold your funds for ten more days before they can disburse them to TU. The total required processing time is three to four weeks. 
  • Most lenders won't allow your private loan and other aid to exceed your Cost of Attendance budget.
  • To view your other aid offers, log in to your Towson Online Services Student Dashboard.
  • Federal regulations also require private loan applicants to complete a Private Education Loan Applicant Self Certification Form (PDF), which is available from this link or your lender.

TU cannot process any private loans for students taking Continuing & Professional Studies courses.