These programs, while generally not as financially attractive as federal loan programs, are a great means for families to meet educational expenses, spreading the costs over an extended period. There are many alternative loan providers, each with a seemingly different loan program. The loan's interest rates and fee structure usually changes based on these options. But with higher borrowing amounts, these programs allow extended repayment periods of 20 to 30 years.
Some programs require ongoing payments while the student is in school.
Other programs allow payment to be deferred while the student is in school and the interest to accrue. Most use either use the US Prime rate or the US Treasury Bill Rates. These rates can be found in the financial section of your local newspaper or the Wall Street Journal. Make sure you get what you want. Most alternative loan programs charge guarantee and origination fees.