There is no origination fee for this loan. Those students who know that they will require an alternative loan should begin the process as early as possible. As mentioned previously, alternative loan information packets and information will be automatically mailed to all students in June 1999. Processing of alternative loans for the 1999-2000 academic year will begin on or after July 1, 1999. Unlike most federally sponsored loan programs, which have no credit requirements, private education loan lenders carefully review credit history to determine eligibility for their loan programs.
Individuals establish a credit history by borrowing money or charging retail purchases.
Financial institutions and major retail stores report their customer's credit information to national credit bureaus, which, in turn, compile the information in the form of a credit report. A credit report is a record of every credit card, retail account, student and personal loan, and other credit accounts made or established in your name. When you apply for an alternative education loan, your credit report will be reviewed. In reviewing your credit report, the lender is trying to determine your ability and willingness to pay based on your payment history. A good credit record indicates that you are likely to repay the loan for which you are applying.