Private Alternative Lender List
The following is our suggested Lender List for the Alternative Student Loan program. We provide the list to assist you in choosing the benefit that best meets your needs. We have chosen these lenders because of their customer service and outstanding savings. We suggest you use one of the choices shown but we will certify a loan for another lender of your choice if you prefer.
*You will also be required to complete a self-certification form in order to receive alternative loan funds.
Be advised - Borrower benefits listed are subject to change and are based on either guaranteed date or disbursement date as determined by the lender; not based on the MPN signed date.
As a general rule, students should only consider obtaining a private education loan if they have maxed out the Federal Stafford Loan. They should also file the Free Application for Federal Student Aid (FAFSA), which may qualify them for grants, work-study and other forms of student aid. Undergraduate students should also compare costs with the Federal PLUS Loan, as the PLUS loan is usually much less expensive and has better repayment terms.
The fees charged by some lenders can significantly increase the cost of the loan. A loan with a relatively low interest rate but high fees can ultimately cost more than a loan with a somewhat higher interest rate and no fees. (The lenders that do not charge fees often roll the difference into the interest rate.) A good rule of thumb is that 3% to 4% in fees is about the same as a 1% higher interest rate.
Be wary of comparing loans with different repayment terms according to APR, as a longer loan term reduces the APR despite increasing the total amount of interest paid. FinAid's Loan Analyzer Calculator may be used to generate an apples-to-apples comparison of different loan programs.
The best private student loans will have interest rates of LIBOR + 2.0% or PRIME - 0.50% with no fees. Such loans will be competitive with the Federal PLUS Loan. Unfortunately, these rates often will be available only to borrowers with great credit who also have a creditworthy cosigner. It is unclear how many borrowers qualify for the best rates, although the top credit tier typically encompasses about 20% of borrowers.
Generally, borrowers should prefer loans that are pegged to the LIBOR index over loans that are pegged to the Prime Lending Rate, all else being equal, as the spread between the Prime Lending Rate and LIBOR has been increasing over time. Over the long term a loan with interest rates based on LIBOR will be less expensive than a loan based on the Prime Lending Rate. About half of lenders peg their private student loans to the LIBOR index and about 2/5 to the Prime lending rate.
Some lenders use the LIBOR rate because it reflects their cost of capital. Other lenders use the Prime Lending Rate because PRIME + 0.0% sounds better to consumers than LIBOR + 2.80% even when the rates are the same.
It is not uncommon for lenders to advertise a lower rate for the in-school and grace period, with a higher rate in effect when the loan enters repayment.
For other sites that compare student loans, see FinAid's list of Student Loan Comparison Sites.
|Lender Information||Interest Rates||Fees||Borrower Benefits||Info/Apply|
|Wells Fargo Collegiate
|Prime + 1.00% to Prime + 7.99%||0%||0.25 interest rate reduction with auto debit 0.50 interest rate reduction at repayment upon verification of graduation||Select|
|Wells Fargo MedCap
|Prime + 1.50% to Prime + 4.00%||0%||0.25 interest rate reduction with auto debit
0.50 interest rate reduction at repayment upon verification of graduation
|Discover Discover Student Loan
|Prime + 0.00% to Prime + 6.25%||0%||0.25% Interest Rate Reduction with Auto-Debit and agreeing to receive E-statements only||Select|
|Citibank CitiAssist Loan||3mth Libor + 2.75% to 3mth Libor + 9.00%||0%||0.25% Interest Rate Reduction with Auto-Debit||Select|
|Sallie Mae Smart Option Student Loan
|Libor + 2% to Libor + 9.875%||0%||0.25% Interest Rate Reduction with Auto-Debit
Tuition Insurance Benefit
|Chase Select Loan
|3mth Libor + 3.80% to 3mth Libor + 9.25%||0%||0.25% Interest Rate Reduction with Auto-Debit||Select|
|U.S. Bank U.S. Bank No Fee Education Loan
|Prime + 0.20% to Prime + 7.70%||0%||0.50% Interest Rate Reduction with Auto-Debit||Select|
|PNC Solution LoanDisclosure||1mth Libor + 3.3% to 1mth Libor + 11%||0%||0.50% Interest Rate Reduction with Auto-Debit||Select|
|Other Lenders||You may use other lenders not appearing on this list|
Lender List Rationale
The University of Saint Francis Office of Financial Aid selected the suggested lenders through an official Request for Information (RFI) process. The RFI concentrated on selecting lenders based on stability, customer service and benefits for borrowers. The areas that were evaluated were benefits offered to the borrower and customer service to student and school. Preference was given to benefits that had the greatest savings and offered variety of choice to the borrower.