Alternative Loan
Alternative loan programs are education loans that are available through private lenders and are intended to supplement traditional financial aid programs. Loan terms, interest rates and fees vary by lender. Many require that a student be credit-worthy or have a credit-worthy co-signer.
Students are encouraged to research the various loan options and select the loan program that best fits their circumstances. Students must request an application directly from the lender, although many lenders will allow you to apply on-line.
The UTSA Office of Student Financial Aid and Enrollment Services encourages you to consider your options for Federal and State financial aid programs before applying for an alternative loan.
Click on the links below for Alternative Loan Frequently Asked Questions:
Who can apply?
What are the requirements to receive an alternative loan?
How do I complete an alternative loan application?
How does the alternative loan affect my financial aid?
What is the interest rate/origination fee for an alternative loan?
What is the alternative loan repayment period?
What is the processing time on certifying an Alternative Loan?
What type of information will the lender review to determine my credit worthiness?
What is credit history?
What is a FICO score?
Who uses the FICO score?
Why is it important to review your credit score before applying for credit or a loan?
What should I do if I don't have a strong credit score?
Where can I get a copy of my credit report?
Who can apply?
Any student who is currently enrolled at UTSA for the term they are requesting the funds for.
What are the requirements to receive an alternative loan?
- Some lenders require that a student needs to be at least half-time per semester and for others the minimum requirement needs to be enrolled for three credit hours.
- Some lenders require the student to be pursuing a degree.
- Some lenders require that a student needs to be making Satisfactory Academic Progress (SAP) during the semester.
- It is the students responsibility to make sure they know what criteria pertains to the loan.
How do I complete an alternative loan application?
You must choose the lender you want to use to pursue the alternative loan and complete the alternative loan approval and application process.
Once your lender of choice has received all the required documentation and approved your loan, they will notify the UTSA Financial Aid & Enrollment Services office by sending a pending school certification online, fax, or by mail.
- Some lenders are not set up to notify schools electronically will send the pending certification form directly to the student. Students will be required to submit the paperwork to Financial Aid & Enrollment Services with the proper address and phone number of the lender attached.
How does the Alternative Loan affect my financial aid?
- Students can generally borrow the difference between the university's cost of attendance minus the students other financial assistance.
- Filing the FAFSA is not a prerequisite for borrowing an Alternative Loan, but students are encouraged to complete a FAFSA, so they can be considered for the maximum aid they may be eligible for.
What is the interest rate/origination fee for an Alternative Loan?
- Loan terms, interest rates, and fees vary per lender.
What is the Alternative loan repayment period?
- All information about repayment will be discussed by your lender of choice when you begin the process of pursuing an Alternative Loan.
What is the processing time on certifying an Alternative Loan?
Once UTSA receives the pending school certification from your lender there is a 4-6 week processing time for all Alternative Loans.
- Any holds or issues affecting your financial aid will delay the processing of your loan.
- Any pending certifications that are incomplete will delay the processing of your loan.
- Students pursuing an Alternative Loan will no FAFSA on file will be delayed an additional 4 weeks on top of our regular processing time of 4- 6 weeks.
What type of information will the lender review to determine my credit worthiness?
Lenders will review your credit history in order to determine if you are likely to repay your debt. They look at your payment history, amounts owed, length of credit history, any new credit you have applied for, and types of credit used.
What is credit history?
It is a record of how you repay your debts. Information from your credit history is gathered and kept in a credit report. The information in your credit report is compiled and given a credit score. The most common credit score used by lenders is the FICO (Fair Issac Corporation) score.
What is a FICO score?
A numerical FICO score is assigned to your debt obligations based on how you repay. FICO scores can range from 300-850. A Higher FICO score means a lender is more than likely to approve your loan application, because you have demonstrated responsible and on-time repayment habits for your debts. An average FICO score is 678.
Who uses the FICO score?
The FICO score is used by all three major credit bureaus that provide credit reports: Equifax, Experian, and TransUnion. It is a good idea to review your credit report before you apply for credit or a loan.
Why is it important to review your credit score before applying for credit or a loan?
If you have a credit score that is at or below the average FICO score of 678 then a lender may consider you high risk, and could deny your application. As mentioned earlier too many credit inquiries can lower your credit score. On average a credit score is lowered about 5-7 points per inquiry. By reviewing your credit report first it can help prevent damaging your credit score further.
What should I do if I don't have a strong credit score?
Apply with a co-borrower that has a strong credit score. This increases the likelihood that your loan application will be approved.
Where can I get a copy of my credit report?
You are entitled to one free copy of your credit report per year at www.annualcreditreport.com. Although they charge you a fee you can also receive your credit reports from each of three major credit bureaus: www.equifax.com, www.experian.com, www.transunion.com. Also for a fee you can get a copy at www.myfico.com.