Private (Alternative) Loans

Private educational loans are available from a number of lenders for students whose cost of attendance has not been met with other financial aid. The FAFSA (Free Application for Federal Student Aid) is normally not required to apply for a private loan.

Private loan programs differ from federal student loans, and also from Parent PLUS or Grad PLUS loans, in several ways:

  • Annual and total loan limits are higher than federal student loans.
  • Interest rates and fees vary by lender.
  • Rates are normally variable and change on a quarterly basis.
  • Loan approval and the rate of interest are based on credit approval and approval is not guaranteed.
  • Most students will be required to secure a co-signer.
  • Loans are not federally guaranteed; therefore, they do not have the same deferment, cancellation and consolidation benefits.
  • The terms and conditions for private loans vary greatly.

Michigan State University has partnered with ELMSelect to offer a tool that will help students and families. ELMSelect for MSU has collected all private lenders used by MSU students in the past five years. The tool allows you to select lenders that specialize in your area of study, and to compare rates and conditions in order to select the loan product that best fits your need.

When can I apply for a loan?
You should begin the application process 4 to 6 weeks before you need the funds to ensure timely processing.
When will the loan be disbursed to my MSU Student Account?
Disbursement of funds depends on when the loan is approved. MSU policy is to disburse no earlier than 10 days prior to the student's first day of class in a semester or summer subterm. If that date has passed and the approval process has been completed, MSU will generally disburse the funds within 2 days of receiving the funds from the lender.

Use the comparison tool to find out when repayment begins on your loan, the interest rate, and any other fees.