Private/Alternative Loans

Private/alternative student loans are unsecured non-federal education loans from private commercial lending institutions for creditworthy borrowers. Private 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 federal aid, and should explore your federal student loan options.  For most borrowers, the federal loans offer lower interest rates and overall financing costs. For students who complete the FAFSA as dependent students, your parents can borrow Federal Parent PLUS Loan, which are usually better than private loans. If you or your parents have an excellent credit rating, you should carefully compare the federal and private loan terms, because some private lenders offer better rates to applicants with great credit ratings.

Choosing an Private Loan Lender

As with all borrowing, you must carefully consider the private loan terms before borrowing them. 

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 different lenders offer private student loans. To find lenders, check with your bank or lending institution, or search the Web for “private student loans” or “alternative student loans.”

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 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 in Continuing & Professional Studies courses.