Private Student Loans
A college education is one of the best investments you can make, but borrowing money should still be done prudently. Wise borrowing of federal and private loans will enable you to pay the educational and living expenses necessary to accomplish your dream of becoming a college graduate.
Federal and State Aid First
You should utilize your maximum federal and state financial aid eligibility before borrowing a private student loan. Private student loans should not be your primary source of funding. The terms and conditions of federal grant and loan programs may be more favorable that those of private student loans. Mercy College will not certify a private student loan on your behalf until you have filed a FAFSA and applied for federal and state financial aid.
Some Questions to Consider Before Selecting a Private Loan
The following are some of the questions that should be considered as you research private loan options.
- When should I apply for a private loan?
It is recommended that you apply for a private loan four to six weeks before your tuition payment is due. Be sure to follow up with the lender to ensure that you have completed all necessary paperwork. Your loan should be fully approved by the lender at least 7 business days before classes to ensure Mercy College will receive funds by the tuition deadline and avoid a potential late fee.
- What is the interest rate and how often does that rate change?
Interest rates on private student loans are generally variable and can change monthly or quarterly. Most rates are determined by using a financial standard such as Prime or LIBOR plus a margin that is usually based on the creditworthiness of a borrower and cosigner.
- Is the lender charging fees for processing the loan?
Some lenders charge up-front origination fees that are a percentage of the loan, while others may charge repayment fees. If fees are taken out of the loan proceeds, you are still responsible for paying back the full loan amount including the fees.
- Do I need a cosigner on the private loan?
Most loans require a credit-worthy cosigner. Even if a cosigner is optional, one is recommended as it will usually yield a lower interest rate for the borrower.
- Am I required to make interest payments on the loan while I’m in school?
Some lenders do require interest only payments while the borrower is in school. Making these payments will reduce the overall cost of the loan and can be done even if the lender does not require it. If the lender is requiring these payments, it is important that you have the ability to make those payments.
- Does the lender have a yearly or cumulative (aggregate) borrowing limit?
Is you evaluate what you need to borrow over your college career, keep these limits in mind.
- Are there any borrower benefits associated with the loan?
Many lenders offer benefits for a certain number of on-time payments, payments received through electronic funds transfer and even graduation. Some lenders also offer possible release of cosigners after making a certain number of on-time payments.
- What are the repayment terms on the loan?
Generally, most loans have a six-month grace period after graduation before repayment begins. The length of repayment period varies by lender and usually ranges from 10 to 20 years.
2013-2014 Private Loan Preferred Lender List
The Financial Aid Office has entered into a preferred lender arrangement (PLA) in order to better serve our students and families. Federal and state regulations require Mercy College to provide the following disclosures:
- Students may borrow from the lender of their choice and are not required to borrow from a lender on the preferred lender list. The Financial Aid Office will process your loan in a timely manner regardless of your choice of lender.
- A great deal of care was taken in the selection of these preferred lenders. The lenders on the preferred lender list were evaluated based on favorable loan terms including interest rate, fees, benefits, and customer service. The lenders selected on the preferred lender list are not affiliated.
- Mercy College adheres to a comprehensive Financial Aid Code of Conduct for Educational Loans.
Mercy College utilizes a third-party tool for our preferred private lender list called FASTChoice. You are not required to use this search tool, and can use other methods to perform your own research. Mercy College is not responsible for the content or accuracy of outside websites.
To leave the Mercy College website and proceed to the FASTChoice website, click here.