The alternative student loans are also called private student loans, meaning they are from private lenders. Standard college loans like Stafford Loans or Plus Loans are provided by federal and state governments. These alternative loans are available to help pay for various types of education. With alternative loans, you can get financing to pay for not only undergraduate and graduate college levels, but also for vocational and continuing education programs.
It is important to know that alternative college loans are based on your credit score. So for those with bad or no credit history, a co-signer likely will be required. It is important to understand the interest rates and loan repayment terms before applying for an alternative loan to ensure you are making an informed decision. Private lenders have different standards and requirements than government lenders.
One well-known alternative ender is Sallie Mae, which has the Sallie Mae Smart Option Student Loan. This loan program allows you to borrow money to cover the entire cost of your college education, minus what you have received from other financial aid sources. The program allows you to graduate college with as little debt as possible, and it works with you to pay off the debt as quickly as possible. One of the requirements of the program is that students make interest-only payments while still in college and during the six months after college graduation, so that the student borrower will not have to pay the capitalized interest. Students can also receive a lower interest rate with an approved co-signer.
Another well known alternative lender is Chase, which has the Chase Select Private Student Loan. The program, like the Sallie Mae program, allows you to borrow money to cover the entire cost of your college education, minus other financial aid funds. This loan program requires certification from your college's financial aid office. With this program, students can also receive a lower interest rate with an approved co-signer. Some of the benefits include no payments while the student is in school and no fees for origination. The loans cover tuition, books and living expenses, along with the purchase of a computer.
The Wells Fargo Private Student Loan, like the other alternative programs, covers all expenses, minus other financial aid. The program also covers tuition, books, living expenses and computer purchase. This loan program offers a 0.50 percent deduction on your loan interest rate upon graduation and an added 0.25 percent deduction on your interest rate with an automatic-payments option. It does not require you to start making payments until after you graduate or stop attending school.