An Alternative Loan is a private, non-federal loan from an outside source such as a bank or other lending institution. An Alternative Loan can be used when you are no longer eligible for a Direct Loan, or to help close the financial gap between the cost of attendance and all other forms of financial aid. These loans are different from the William D. Ford Direct Loan Program because they are not guaranteed by the federal government. They are designed to be utilized as a last resource after all other federal grant and loan options.
Students have the right to select the alternative lender of their choice. We do not recommend any one in particular. In order to better serve our students and their families, a Lender Comparison List is available through ELM to assist you in finding a loan that works for you. UB will continue to accept loan certifications for ALL private education lenders. List of key research points for students and parents to consider when looking for an alternative loan lender:
- Interest rate
- Loan fees (origination, disbursement, and repayment)
- Decision criteria
- Minimum and maximum amounts to borrow
- Enrollment requirements (half time or less)
- Duration and types of deferments offered
- Borrower benefits
- Repayment terms
- Past due balance eligibility
Borrowers need to choose an alternative loan product carefully and be sure they fully understand the terms and conditions of an alternative loan prior to signing a promissory note with a lending institution. Students have the right to select the alternative lender of their choice. Credit guidelines apply in determining eligibility, and vary from lender to lender. Credit checks are normally performed at the time of application and are time sensitive. Check with your specific lender to determine credit check time frame and expiration policies. New federal regulations require all students that apply for an alternative/private loan to complete a Private Education Loan Application Self-Certification form (PDF). Your lender will require this form as part of your application process. The form can be submitted by fax, paper, or electronically depending on your lender. The form requires you to submit your cost of attendance, estimated financial assistance and the difference between both. All of this information can be found on your financial aid award letter or by contacting the Financial Aid office. Submit this form directly to your lender, not to the University at Buffalo.
Several steps are involved in the alternative loan process. Once you have submitted your application:
- The lender will perform a credit check to determine a preliminary approval. If your application passes the credit check, the loan request is sent electronically to UB.
- A UB financial aid advisor will compare your enrollment details to the lender eligibility requirements. The advisor will either certify or decertify your loan depending on your ability to meet all lender requirements, and electronically return the application to the lender.
- Certified loans will be added to your financial aid awards in HUB Student Center. Alternative loans will be included as anticipated aid (PDF) on your eBill.
- At this point, the lender will contact you to notify you if you are approved, denied, or if more information is needed.
- If approved, you will be given a 3-day Right to Cancel (or Rescission) Period, which is required by Federal Regulation. The lender will provide you with details on how to cancel your loan should you no longer wish to borrow funds. You will only have to complete the Right To Cancel forms if you are cancelling your loan request.
- Once the 3-day Right to Cancel Period has elapsed, the lender will complete the loan process. This typically takes lenders an additional 10-14 days. We recommend allowing at least 3 weeks between the day you apply for the loan and the day the funds will be sent from the lender to the university.
- When the lender has completed the transaction, the loan funds will be sent directly to the Office of Student Accounts, who will apply the funds to your account. If you have an outstanding balance, the loan funds will be applied to that balance. If the loan amount exceeds the amount due, you will be issued a refund.
- Complete your registration before applying for a loan.
- Your loan amount is limited to your total cost of attendance, or budget, minus all other financial aid awarded. Your cost of attendance will vary depending on your enrollment status (full-time, part-time, less than part-time). Completing your registration before applying for your loan will eliminate the possibility of certifying an incorrect loan amount.
- Select the correct School Code on the loan application.
- The School Code for SUNY University at Buffalo is 002837-00. If you are applying for a loan specifically for the International Dental Program, select SUNY University at Buffalo – IDP.
- Choose the correct loan period.
- If you need loan funds to be paid towards one specific school term, your loan period should start on the first day of classes, and end on the last day of classes. If you select a full academic year as the loan period, your total loan amount will be split into even disbursements and applied to each term. (Example: A loan for $10,000 with a fall-spring loan period will be split into two $5,000 disbursements. The first will be applied to the fall term and the second will be applied to the spring term).
- DO NOT borrow funds you do not really need.
- Use the Loan Repayment Estimator to see how much you will end up repaying once the interest and fees have been applied. Stay within your long term budget.
- Consider a cosigner.
- Most lenders will only require a cosigner if the borrower’s credit score is not high enough to be approved on its own. However, even borrowers with good credit scores may receive a lower interest rate if a cosigner is used.
Return or reduction of disbursed alternative loan funds will only be considered if:
- A student becomes ineligible for the loan funds due to a change in enrollment.
- A student is receiving additional funds not taken into consideration at the time the loan was certified.
- Returning the Alternative loan funds would allow the student to borrow from one of the more favorable Federal Loan programs such as the Direct, Parent PLUS or Graduate PLUS loans.
- Fraud is suspected.
Information is subject to change without notice due to changes in federal, state and/or institutional rules and regulations. Students must complete a FAFSA every year. Students must be making satisfactory academic progress to continue to receive financial aid.