Private education loans are specific consumer loans in the student's name offered by private lenders to help pay education expenses for the year. These need to be researched very carefully as they are not federal loans. Our office recommends utilizing WLC payment plans and Federal Direct Subsidized, Unsubsidized and PLUS loans first before borrowing a private education loan.
Features include:
- Cosigner is usually required
- Must undergo credit check
- Variable interest rates may change monthly or quarterly
- Fixed interest rates offered by some lenders
- Line of credit loans offered by some lenders
Tips for Selecting a Private Education Loan
- 1. Where can you find a Private Education Loan?
Some banks and credit unions offer private education loans. You can borrow from a lender of your choice or from a lender listed on the WLC Private Loan Options site.
- CU Student Loans
- Discover Student Loans
- Minnesota SELF Loans (must be a Minnesota resident)
- Sallie Mae Smart Option Loan
- Sallie Mae Graduate School Loan
- Thrivent Federal Credit Union Private Student Loan
- Wells Fargo Collegiate Loan
- Wells Fargo Graduate Loan
- 2. What are the interest rates and fees charged private education loans?
Each lender determines the interest rate and fee structure for its own loan programs. Most lenders do not charge fees at this time. Many lenders do offer both fixed rate and variable rate loans. They will typically base the interest rate on a benchmark such as prime or LIBOR plus a specific percent margin. For variable rate loans, as prime or LIBOR go up or down, so will your interest rate.
- 3. When does repayment begin and how long does it last?
Many private education loan programs start the payments 6 months after college graduation (or after leaving school). Interest accrues while you are still in school. Typical repayment plans last anywhere from 7-25 years. You will save money by making interest-only payments, by making $25 monthly payments, or by starting immediate repayment on the principal and interest of the loan while you are in school. To save even more money, consider paying the loan off as fast as possible!
Remember to borrow only what is needed when using a private education loan. Compare loan programs to determine the program that is best for you.
Private Lender Selection Disclosure
Wisconsin Lutheran College officials select private lenders based on the best interest of the students. The criteria includes but is not limited to benefits offered to the borrower, customer service provided to the borrower, ease of applying for loans and timely processing. The list includes three or more lenders and is reviewed annually to ensure that the lenders continue to meet our criteria. Borrowers can select a lender from the list or any other lender of their choice.
Wisconsin Lutheran College prohibits officials from accepting benefits (financial or other) from lenders. These prohibitions include: participating in revenue-sharing arrangements where Wisconsin Lutheran College would receive revenue for recommending lenders to students; accepting gifts of more than minimal value including trips and entertainment; allowing contracting arrangements related to education loans; assigning students to a specific lender or refusing to certify a loan from a specific lender; accepting offers of funds for private loans; accepting assistance with office staffing from a lender; and receiving anything of value from a lender, guarantor or group for serving on an advisory board except for reimbursement of reasonable expenses incurred for serving on the board.
Wisconsin Lutheran College is allowed to accept training materials, training sessions, assistance with entrance and exit loan counseling sessions as long as the presenter does not promote the services of a specific lender and philanthropic contributions as long as they are not related to education loans.