Private Student Loan Questions & Answers
If there’s a question about our student loans, we’ve probably answered it. But, if you still can’t find the information you’re looking for, we invite you to get in touch with us anytime. Simply visit the Contact Us section of our website.
Types of Loans and Eligibility
What types of loans are available?
You can apply for undergraduate or graduate private education loans through Student Loan Scout. These loans can be school-certified or direct-to-consumer. If the loan you choose is a school-certified loan, then the school must approve it and in this case the lender will send the funds directly to your school. Your other choice is a direct-to-consumer (DTC) loan. A DTC loan does not have to be certified by the school. The cost of these two types of loans may vary.
Who can borrow through Student Loan Scout?
In general, borrowers must be creditworthy U.S. citizens, nationals, or permanent residents. International students may apply with an eligible co-borrower from the U.S. Any student who does not meet credit, income, and/or employment guidelines should apply with an eligible co-borrower who does. A co-borrower can be a parent or any other eligible adult sponsor such as a relative, spouse, or guardian.
How old must a student be to receive a private student loan?
The age of majority (the age at which a person can enter into a binding contract) is 18 in all states (and the District of Columbia), except for Alabama and Nebraska where it is 19 and Mississippi where it is 21.
As a student, can I apply for a loan through Student Loan Scout on my own?
You can apply for a loan on your own, but you should consider adding a co-borrower if your credit record is not well established. Adding a co-borrower can improve your loan approval chances and can decrease the cost of your loan.
How will credit eligibility be determined for these loans?
Your credit history, your field of study and other factors will be considered by the lenders to determine your ability to repay the loan. If you include a co-borrower, the co-borrower’s credit history (if better than yours) will improve your overall evaluation and can reduce the cost of your loan.
What information do I need to provide to apply for a loan?
When you apply online, be sure to have the following information available:
• Full name
• Social Security Number
• Date of birth
• Permanent home address and time at residence
• Own/rent and monthly payment
• Home phone
• Employer and time employed
• Occupation/position
• Business phone
• Gross annual income
• Reference
If a co-borrower is applying with you, he or she will need to provide this information as well.
Loan Limits and Appropriate Uses
How much can I borrow?
Typically, you may receive the amount equal to the cost of attendance, minus any financial aid. Many lenders also have a life time limit.
What expenses can a private student loan cover?
Private student loans can be used for any and all education-related expenses including tuition, room and board, off-campus housing, living, transportation, uniforms, books, lab fees, computers, supplies, and past school fees. If you have dependents, such as a child or an elderly parent, you may even use your loan to cover the cost of caring for them while enrolled.
Cost of Borrowing through Student Loan Scout
Are there any fees or costs associated with loan obtained through Student Loan Scout?
The use of Student Loan Scout is free for the applicant, however, there are often lender-related fees and other costs associated with private loans. Please review the “My Account” page for details - your loan choices and all of the interest rate and fee information related to a specific lender are displayed there.
Is the interest rate of private student loans fixed or variable?
The interest rates are typically variable, based on either the Prime or Libor Rate plus a margin based on several factors, such as credit score and other factors.
How is the interest on my loan capitalized?
This is done differently by each lender. You should ask the lenders prior to making your decision. The interest can be capitalized daily, monthly, quarterly, annually, at the end of school attendance or after the grace period (if any).
What if the student is already working with his/her college on a financial aid package?
You are free to choose your lenders. Your school may recommend certain lenders, and you should consider those lenders, but understand why they are being recommended to you.
Will these loans have the same advantages as the private loans offered through the college financial aid offices in terms of deferred payments?
The advantages of the loans offered through the financial aid offices will most likely be offered through Student Loan Scout, although it is always good to check once you’ve received the offers on the Student Loan Scout website.
Does Student Loan Scout offer federal loans?
Student Loan Scout does not currently offer federal loan choices. This will be coming up in our next phase of upgrades.
The Application Process
How does the application process begin?
The loan application can be filled out online - click on APPLY NOW at the top of this page.
Is confidentiality assured?
Student Loan Scout’s application data will be held in strict confidence and will be shared only as provided in our Privacy Policy (see link on the bottom of this page).
What happens after I apply online?
We will send your application data to the lenders that have loans that match the type of loan you are requesting. The lenders that receive your data will run a credit report on you and, if applicable, your co-borrower. The lenders will then decide whether you qualify to receive a loan offer. If so, they will send the offer to us, including the rate, term, fees and any other conditions so that we can post the information on your “My Account” page for your review and consideration.
What will you do with my application data?
We send it only to lenders that have a product or loan that matches your request. The lenders can only participate with us if they have agreed to keep any application data they receive from us secure and in compliance with all applicable regulations covering you and your personal data. The lenders are not allowed to contact you directly until you either accept the loan they have offered you, or after 90 days, whichever comes first. If the lender declined to make you an offer, they may never contact you using the data we sent them. We never sell your name or personal data.
How long does it take to receive a loan?
It depends on a lender and whether you've chosen a school channel or a direct-to consumer loan (see Glossary for definitions), however, most lenders will disburse funds within a few days of receiving all the required documentation.
How can I check on the status of my loan or find out when my funds will be available?
You may check your loan status online via My Account link on top of this page, or by phone by calling (866) 395-6759. Your user ID, password and a shared secret (all created by you when first applying) is required to access the information.
Are there application deadlines for loans offered through Student Loan Scout?
No, you may apply for a loan via Student Loan Scout loan at any time.
Should I advise my financial aid administrator that I have applied for a private student loan?
It is vital to notify your school of any financial aid you are receiving from other sources.
What if I've received a loan via Student Loan Scout and discover I need more money during the same academic period?
You may reapply online for more funds if you have not reached the annual maximum amount for which you're eligible.
What is an acceptable proof of enrollment?
Generally, lenders will ask for one proof of enrollment for the loan period for which you are applying, before final approval. Acceptable proof of enrollment usually include:
• A copy of the tuition bill from the school
• A copy of the acceptance letter from the school verifying enrollment
• A copy of the registration schedule from the school printed with the student's name
What is an acceptable proof of income?
Generally, lenders will ask for one proof of income before the final loan approval. If applying with a co-borrower, the co-borrower must also provide this information. Acceptable proofs of income usually include:
• A copy of a current paycheck stub with year-to-date earnings
• A letter from the employer on company stationery listing hire date, full-time status, hours worked, and salary
• For self-employed individuals, tax returns complete with all schedules for the last two years
• For retired individuals, 1099 forms for the last two years
What if my school is not listed as a participating school?
If that is the case, none of the lenders on the Student Loan Scout platform currently make loans to students attending your school. You are welcome to contact us, so that we can encourage the lenders to consider your school.
Does the college or university have to approve this loan?
If the loan you choose is a school-certified loan, then the school must approve it. Your second choice is a direct-to-consumer loan. It does not have to be certified by the school. The cost of these two types of loans may vary.
Who will the proceeds of the loan be paid to?
Depending on whether you’ve chosen a school-certified or a direct-to-consumer loan, funds will be sent either to your school, or to you/your co-borrower directly.
Can the progress of the application be followed electronically?
You can log on anytime to your “My Account” page on our website to see the status of your application.
Repaying Your Loan
Do I have to start making payments right away?
It depends on the loan you choose. Many lenders offer no payments or interest only while you are attending school at least half time and possibly for a period of time once you leave school.
Is there a "grace period" before I begin repayment?
Your lender may offer a grace period – a period after you leave school or drop below half time – that you do not have to start making payments. Please check the details with your lender.
Is there a minimum monthly payment?
There usually is. Check with your chosen lender.
How can I save money while repaying my loan?
Pay on time, pay extra if you can. This will save on the interest adding up.
How long do I have to repay the loan?
This depends on the arrangements you make with your lender, often based on the amount you borrow.
What can I do if I encounter economic hardship that interferes with my ability to repay my loan?
Talk to your lender about the special arrangements they might offer for situations such as this.
What is a deferment?
Deferment is a postponement or suspension of repayment for a specified time, generally during the in-school period. The terms of a deferment are generally described in the promissory note. You should contact your lender for details.
What is a forbearance?
Forbearance is a temporary postponement, or a possible extension of payments, or an agreement to reduce payments by special arrangement between the borrower and the lender. It is usually described in the promissory note. You should contact your lender for details.