Private/Alternative Loans

Private/alternative student loans are unsecured non-federal education loans from private commercial lending institutions for creditworthy borrowers. Alternative student loans usually have higher interest rates than federal loans. However, the interest rates on these loans can be lower than conventional credit products such as personal loans and credit cards.

Consider Federal Loan Options First

Before applying for a private loan, you should apply for financial aid, and should explore your Federal Direct Loan options. For most borrowers, the federal loans offer lower interest rates and overall financing costs. If you have excellent credit, you may be able to borrow a private loan with a better interest rate, making it worthwhile to carefully compare your federal and private loan options. If the student applied for aid as a dependent student, his or her parent can apply for a Federal Parent PLUS Loan for undergraduate students before looking at other options.

Choosing an Private Loan Lender

As with all borrowing, students and parents must carefully consider the terms of an alternative student loan 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 $x?
  • Do I need a co-signer?

Many lenders have alternative student loan options. Check with your bank or lending institution, or search the Web for “alternative student loans” to find information on participating lenders, application requirements, interest rates, loan limits and repayment options.

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 will 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 aid offers, log in to Towson Online Services.
  • Federal regulations also require private loan applicants to complete a Private Education Loan Applicant Self Certification Form (PDF), which can be obtained from your lender or this link.


Office of Financial Aid

Enrollment Services
Room 339
All Contacts & Resources
Mon-Thurs, 8:30 am-5 pm; Fri, 8:30 am-4:30 pm (Call Center)

Mon-Thurs, 8 am-5 pm; Fri, 8 am-4:30 pm (Reception Desk)