Private or Alternative Loans

The student’s eligibility for a loan is determined by the cost of attendance minus other financial aid or the loan maximum determined by the lender.

• Apply no more than 60 days prior to the start of the term. Applying too early may result in expiration of your credit approval and would require a new application with the lender.

• Your loan will be certified based upon the number of courses for which you are enrolled.

• Determine how much you will need to borrow. You can view the breakdown of your expenses vs your financial aid in your ZotAid portal for the academic year in which you are applying.

You have the right to select the private lender of your choice. The University of California has also devleoped a systemwide common lender list based solely on factors related to the borrower's best interest: financial terms of the loan, loan features and the quality of service. Your bank, credit union, or other financial institution can also be a good place to start your search for a reputable loan lender. 

Eligibility, rates, terms, and conditions will vary according to the lender. Some of the most common requirements are that the borrower is enrolled in a degree program and is enrolled at least half-time. The interest rate that you are offered will be based on your credit worthiness.

Please be aware that some lenders do not have an electronic certification process, which will extend the time it takes to certify the loan and disburse the loan funds. Check with your lender regarding their certification and disbursement process and apply at least 30 business days prior to the term fee deadline.

Eligibility

• What are the minimum and maximum loan amounts available?
• Will this loan meet my long-term educational borrowing needs as well as my immediate short-term needs?
• How will my credit rating affect my loan?
• Is a cosigner required? If so, under what conditions?
• Is there an option to release the co-signer at a later date?

Interest rate and fees

• Does the spread/margin over the interest rate fluctuate?
• Is there an interest rate cap?
• What is the current interest rate?
• What additional fees, interest reductions, or other incentives are offered during the life of the loan? If any, do these conditions vary based on credit rating, academic level, or availability of a cosigner?
• When are late charges assessed, and how much are these charges?
• How is my loan capitalized — annually or only at repayment?

Repayment terms and conditions

• What are the minimum and maximum terms and payment amounts?
• When do payments begin?
• Can interest-only payments be made while still in school?
• Is there a penalty for paying off the loan early?
• Does the lender offer combined billing of private and federal loans?
• Are grace periods, deferments, or forbearance offered? If so, what are the conditions, and how is interest capitalized during these periods?

Borrower benefits

• Does the lender offer any other borrower benefits? If so, what are the eligibility requirements?
• If a borrower does not qualify for a benefit, what is the appeal process?

Service

• What is the turnaround time for credit decisions and disbursement of funds?
• How are problems resolved? Does problem resolution occur in person, by phone, online, or another method?
• Is there access to loan information through the web?
• What is the lender's policy on selling loans to other lenders after the loan has been disbursed?

Once your loan is approved by your lender and you have uploaded your alternative loan certification request form to your ZotAid portal, your loan will be certified and scheduled for disbursement. Certication is when we verify that you meet the eligibility criteria specified by your lender for your particular loan. If we are unable to certify your loan, we will send you a message explaining the issue.

Eligibility will include items such as:

• Enrollment: Does your lender require half-time enrollment? Have you withdrawn from the term?

• Level: If you are an undergraduate student, did you apply for an undergraduate loan?

• Academic Progress: Does your lender require you to be meeting SAP?

• Degree Status: Does your lender require you to be in a degree-seeking program?

If we certify the loan, it will appear in ZotAid. Once it is disbursed, it will be reflected on your ZOT Account billing statement.

An increase is not possible after the loan is accepted in ZotAid. If you wish to increase the loan amount after the loan is certified, you will need to submit a new application with the lender for the additional amount needed.

Plan ahead when applying for a private loan and be sure to complete all items requested by the lender. This process generally takes 3 weeks to complete.

Keep in mind that due to the Federal Truth In Lending Act (TILA) regulations:

• The date of disbursement of your loan cannot be changed.

• You will have a 10 day right of rescission once the loan has been approved, before the disbursement can be requested. This is a period where disbursements are held in order for you to have a final chance to change your mind and cancel the loan without penalty.

• Contact us to reduce your loan.

TILA requires you to complete and submit a self-certification form to your lender for each individual application:

• If your lender does not provide the form, please print the form linked directly above, complete, and return to your lender

  You can find your cost of attendance and estimated aid for the period of enrollment covered by the loan in ZotAid

• Return the self-certification form to your lender

TILA also requires lenders to provide you with three disclosures:

1. Upon the completion of your loan application

2. When you are approved for your loan

3. At least three days prior to the disbursement of your loan

You must maintain eligibility in order for your loan to disburse. If you drop to less than half-time or withdraw before your loan disburses or you no longer meet the requirements of the lender, then your loan will be cancelled.

It can take 30 days for your loan to be certified and ready to disburse. We will begin to request disbursement of funds 10 days prior to the beginning of a term and on an ongoing basis thereafter. Monitor your ZotAid and the account that you have established at your lender to be sure that you are completing all the steps required to have your funds approved and disbursed in a timely manner.

Federal, state, and institutional sources are not available to cover a balance from a previous semester. There are private education loan lenders that will allow to your borrow a loan for a period within the previous 12 months (365 days).

Select a Lender

You have the right to select the private lender of your choice. The University of California has also devleoped a systemwide common lender list based solely on factors related to the borrower's best interest: financial terms of the loan, loan features and the quality of service. Your bank, credit union, or other financial institution can also be a good place to start your search for a reputable loan lender. 

Eligibility, rates, terms, and conditions will vary according to lender. Some of the most common requirements are that the borrower is enrolled in a degree program and is enrolled at least half-time. The interest rate that you are offered will be dependent on your credit worthiness.

Select the correct loan term

It is important to select the correct loan term. To borrow for a prior balance, you will need to select the loan term for that academic year. We are not able to correct the loan term of a private loan application.

Processing the loan

If you apply for a loan for a prior academic year, the application will be placed on hold and we will send a communication to your UC Irvine email notifying you that the loan certification request has been forwarded to us from your lender.

Contact our office to verify that you did intend to apply for a previous period of enrollment. We will process the loan and it will show in ZotAid within approximately three to five business days. Once the loan shows in your ZotAid, you will need to accept the loan in order for the loan to appear as a credit on your ZOT Account billing statement.

Deferment usually lasts from the time the money is borrowed until graduation and any specified “grace period.” During this time, interest may accrue, but the student typically does not need to make payments. Some loans will allow you to pay to accruing interest over time; these are called interest-only payments. We recommend that you make interest payments (if you are able) in order to lower the total amount that you will re-pay over the life of the loan. This will vary by lender and product, so check each loan for details.

You are being provided with this private education loan information because you have previously borrowed a private loan. As a borrower, you are obligated to repay your loan to a specific lender. Review this information to determine who to contact regarding the repayment of your private education loan(s).

Private Loan Lenders

The terms and conditions of private loan programs vary widely. Therefore, it is important for you to contact the education lender(s) from which you borrowed your loan(s). Since you have signed an application/promissory note for any private loans you borrowed, you should already know which lenders(s) have accounts for you. Please refer to your loan documents for contact information.

Contacting Your Private Loan Lender

Contact the lender(s) of your private loan(s) for answers to the following questions. Many of these questions are answered in your promissory note or loan agreement documents that you signed when you applied for the loan(s). When you signed the promissory note(s) or loan agreement(s), you agreed to all the terms and conditions that were in effect at that time.

Interest Rates and Fees

• What is my interest rate?

• If the interest rate is variable, what is the maximum possible rate I could be charged?

• What is the minimum and maximum length of repayment?

• What is the payment amount?

• When is the first payment due?

• Is there a penalty for early repayment of the loan?

• Are grace periods, deferments, or forbearance offered? If so, what are the conditions and how is the interest capitalized during these periods?

Use the student loan repayment calculator determine the amount of your monthly payment.

Borrower/Cosigner Benefits

• Are there any other borrower benefits or incentives (i.e., reduced interest rate for automatic payment agreements)? If so, what are the eligibility requirements?

• If I don’t qualify for a benefit, what is the appeal process?

• Can I access my information on the web?

• Can I release my cosigner (if I have one) at a later date? If so, when?

Rights and Responsibilities

You have the right to:

• Receive a repayment schedule before the initial payment is due

• Be notified in writing if your loans are sold or transferred

• Request a deferment or forbearance if you qualify

You have the responsibility to:

• Repay your loan whether or not you have completed your studies, whether or not you are satisfied with your education, and whether or not you are able to find employment

• Make your loan payment(s) on time

• Inform your lender of any change to your name, address, Social Security card, or employer

• Notify your lender if you are having difficulty making payments

Managing Your Loan Debt

Your skill in managing your finances will have a substantial impact on your future. A good credit rating is essential when making a large purchase, such as an automobile or home. Some prospective employers also review credit ratings.

Careful planning and money management are very important, particularly when you are beginning repayment of student loans. To get a head start on the process, you may want to review and complete the repayment budget worksheet at the end of this document. Use the worksheet to determine what percentage of your projected income will be used for student loan payments.

As a general rule, your student loan payment(s) should be no more than 5-10 percent of your salary before taxes.

If you're having difficulty repaying your educational loans, either federal or private, please be in contact with your lender to discuss your situation. There may be repayment, deferment, or forbearance options of which you are not aware. Ignoring the problem will only make matters worse.

Private Loan Consolidation

There are very few lenders who offer private education loan consolidation.

Before you decide whether to consolidate your student loans, please research the advantages and disadvantages to make sure you are making the best financial decision.

What might happen if my student loan(s) are past due?

• Assessment of late payment fees and other fees to your account(s).

• Reporting of your account(s) to a national credit bureau as delinquent.

• Delinquent credit ratings may affect your ability to obtain loans and employment opportunities in the future.

• Assessment of collection/attorney/court costs to your account(s).

• Loss of all possible deferment/cancellation privileges.

What is deferment?

Deferment is a period of time in which approved borrowers are not required to repay their loans (principal or interest). The following circumstances may enable you to pursue a deferment:

• Full-time or at least half-time study

• Active military duty

• Service as Peace Corps or ACTION volunteer

• Unemployment due to injury

• Disability

• Infant care

Deferment provisions vary, depending on the loan servicer and type of loan program. Several types of deferments are usually available on most student loans.

For more information on deferment options, contact your loan servicer.

If you do not qualify for a deferment but are still unable to make satisfactory repayment, you may qualify for forbearance.