eduKey Undergraduate Loan Q&A
Loan Details | Loan Q&A | Apply | Rate Information | Co-Signer Letter

• General Loan Questions
• Qualifying / Co-Signer
• Applying for a Loan
• Fees and Interest Rates
• Receiving Loan Funds
• Using Your Loan Funds
• Repaying Your Loan

General Loan Questions (back to top)

1. Do I need to complete the Free Application for Federal Student Aid (FAFSA) to receive a private student loan?
No. The FAFSA is completed in order to receive federal loans. A private student loan does not require a completed FAFSA. However, we do recommend that you borrow from the Federal Student loan programs before you apply for private student loans. The Federal Loans may offer lower interest rates and an overall lower cost of borrowing. These loans are administered by your college and require that you complete a Federal Application for Financial Student Aid (FASFA).

2. Can I change my private student loan amount after I submit an application?
Yes. You can reduce your private student loan amount at any time before it is disbursed. You may also be able to increase your requested loan amount but you may be subject to a new credit check.

3. How do I get a private student loan for next year?
To obtain a private student loan for next year, retain your username and password so you may return to our website and complete a new loan application. Most of your information will automatically transfer from your previous private student loan application. Make the applicable changes and submit the application. We will take care of the rest and notify you as to when to expect the loan proceeds.

4. What do I do if I need more money for this year?
To obtain additional funds for this year or request funds for an academic period no more than 6 months in the past, retain your username and password so you may return to our website and complete another on-line loan application. Most of your information will automatically transfer from your previous private student loan application. Make the applicable changes and submit the application. We will take care of the rest and notify you as to when to expect the loan proceeds.

5. What is a Promissory Note?
A promissory note is a written promise to pay a specified sum of money. Be sure to read it thoroughly prior to signing. Do not sign it if there are any blank spaces.

Qualifying / Co-Signer (back to top)

1. What are the basic qualification criteria?
To apply for a private student loan, you must:

• be the age of majority in the state you reside.
• be a U.S. citizen or U.S. permanent resident.
• have a valid Social Security Number.
• be enrolled, or plan to attend, an educational program at least part-time at an accredited, approved college or university.

Obtain a co-signer if you do not have:

• a satisfactory credit history.
• verifiable income of $18,000 per year or more.
• a debt to income ratio of 45% or less.

2. Can I qualify for a private student loan if I already receive financial aid?
Yes. Your eligibility for a private student loan is based on your credit (or your co-signer credit, if applicable).

3. Can I apply for a private student loan if I am not currently employed?
Yes, provided you have a co-signer.

4. Is there an advantage to applying for a private student loan with a co-signer?
Yes, several in fact. Co-signers with a good credit rating can help you:

• qualify for a private student loan, and perhaps even a larger loan amount.
• receive a lower interest rate, which can lower your loan payments.
• establish a good credit history by making your payments on time.

5. What is satisfactory credit?
During the application process, each applicant's credit history will be reviewed. To meet our credit requirements for a private student loan, credit-worthy borrowers and co-signer must:

• be a U.S. citizen or permanent resident.
• have a valid Social Security number.
• have an established history of making on time payments.
• have no major derogatory items on their credit report.
• have no history of bankruptcy or student loan default.

6. How much can I borrow?
This depends on a number of factors including your (or your co-signer's) current debt to income ratio, credit score, etc. However, the private student loan amount may not exceed the qualified higher education expenses at the eligible school listed on your application.

7. Will I need a co-signer?
To receive the best private student loan rates and terms, applicants are encouraged to apply with a co-borrower. A co-borrower can be a parent or any other adult sponsor such as a relative. A co-borrower is subject to the same eligibility requirements and will be required to authorize a credit check in order to be approved.

Applying for a Loan (back to top)

1. How do I apply for a private student loan?
There are 2 ways to apply:

Online - This option is fast, easy, and secure. As soon as you submit your online application, you'll receive immediate notification as to whether you have been approved.

Telephone - You may call anytime between 8 a.m. and 9 p.m. Eastern Time. One of our advisors will work with you to complete your application. You will receive immediate notification as to whether you have been approved for a private student loan. Your private student loan documents will then arrive via mail for you to sign and return.

2. What will I need when I apply for a private student loan?
You’ll need the following information when you apply online or by phone: name, social security number, date of birth, permanent home address, number of years at this address, employer name, and salary.

Fees and Interest Rates (back to top)

1. How is the interest calculated on my private student loan?
Your initial interest rate is determined by your (and/or your co-borrower's) credit history. When you are approved for the private student loan, we will notify you of your initial interest rate.

The interest rate on your private student loan is a variable rate that can change monthly. The variable rate is equal to the "current index" plus a margin. The "current index" is the PRIME RATE published in the "Money Rates" section of The Wall Street Journal. Interest is charged on the unpaid loan amount beginning on the date the loan is disbursed and ending when the private student loan is paid in full.

2. What does interest capitalization mean?
If you selected to defer payments while attending college, the loan interest that has accrued during the deferment period will be capitalized (added to your total principal amount).

3. Will I be charged an origination fee?
An origination fee may be charged depending on your (and/or your co-borrower's) credit history. You may elect to have this fee deducted from the loan proceeds you receive or have it added to the total private student loan amount. If you cancel a disbursement, you may be eligible for a refund of any origination fees if you return the disbursement check, not cashed, within 15 days.

4. Are my interest payments tax-deductible?
Interest may be deductible. You should consult a tax advisor based on your particular circumstances.

Receiving Loan Funds (back to top)

1. How long does it take to get the private student loan proceeds?
This depends on various factors, including the method you use to submit your application. Submitting your application online and signing your private student loan documents electronically is the fastest option.

2. How do I receive my private student loan funds?
Your private student loan funds will be sent to you via U.S. mail at the permanent address listed on your loan application in the form of a paper check. If you have a co-borrower, the check will be made co-payable to you and the co-borrower.

Using Your Loan Funds (back to top)

1. Can I apply for a private student loan now and use the funds for education-related expenses from an academic period in the past?
Yes. Applications can be processed up to 6 months after the end of the academic loan period for which the private student loan is intended. This allows you to use the private student loan to cover past-due balances at your college.

2. Can I use a private student loan for anything other than tuition?
Yes. The private student loan can be used for any education-related expenses, including, but not limited to, tuition, fees, books, supplies, room and board, and transportation.

Repaying Your Loan (back to top)

2. If I don't finish college or if I am unsatisfied with my education, do I need to repay my private student loans?
Yes. Your private student loans are obligations that must be repaid. You are responsible for all amounts due under your promissory note.

3. How much will my monthly payments be?
Your monthly payment amount will depend on how much you borrow, the interest rate on the private student loan, and the repayment terms.

4. Do I have to make payments while I am in school?
It depends. The private student loan you select will have one of the following methods of repayment. Be sure you understand the repayment terms of your loan.

Deferred Principal and Interest - Payments on both principal and interest are deferred until after you graduate from, or otherwise cease to be enrolled at least half-time at, the college identified on your application or any other eligible school. Interest accrues while you are in school. You will receive a 6-month grace period that starts the day after you leave college during which time you do not have to make private student loan payments. When the grace period ends, you agree to make private student loan payments according to the schedule you will be provided.

Deferred Principal (interest only) - Payments on principal are deferred until after you graduate, or otherwise cease to be enrolled at least half-time at, the college identified on your application or any other eligible school. You pay only the interest while in college (as it accrues). You will receive a 6-month grace period that starts the day after you leave school during which time you do not have to start making principal payments but you must continue making interest payments. When the grace period ends, you agree to make private student loan payments according to the schedule you will be provided.

Immediate Repayment - If your private student loan is disbursed in a single installment, you begin making regular payments (principal and interest) the month immediately following disbursement and continue making these payments while in college and after graduation until the private student loan is paid in full. If your private student loan is disbursed in multiple installments, you will begin making regular payments (principal and interest) the month immediately following your final disbursement. In both instances, you will receive a statement showing you when your payment is due. You may pay prior to receiving or pay more than your statement indicates.

Note: There are no prepayment penalties, so the loan can be paid at any time.

5. Are interest payments required during deferment?
See #4 above.

6. Can a deferment be extended or renewed?
The maximum deferment period is 5 years for undergraduate loans and 3 years for graduate loans.

7. How soon after I graduate do I have to start paying my loan back?
You have a 6-month grace period after you graduate or leave school, prior to being required to begin making private student loan payments.

8. How long will I have to repay my private student loan?
The length of time you have to pay your private student loan back is dependent on your type of loan, its repayment period, and the amount of money borrowed. In general, for undergraduate and graduate loans, you will have up to 20 years to repay, and for Health profession loans, you will have up to 25 years. The private student loan may be paid off early without penalty.

9. What happens if I make late payments?
If your private student loan payment is not received within 10 days after it becomes due, you will be assessed a late charge. You will pay only one late charge for each late payment, no matter how many days the payment is late. The late charge is 5% of the unpaid installment payment or $5, whichever is greater.

10. What do I do if I can't pay my monthly loan payment?
If you cannot make your scheduled payments, you may be granted a forbearance that will allow you to temporarily make smaller payments or discontinue making payments for a period of time. You must pay the interest on your private student loan during periods of forbearance, or it will be added to the principal amount of the loan.

Note: Interest continues to accrue on your loan during forbearance.

11. When should I apply for a forbearance?
It is best to apply at least 30 days before you want the forbearance to start. Regular payments must be made until you receive notice that a forbearance has been granted.

12. How long does it take for my forbearance to be processed?
It takes approximately 5 business days for a forbearance to be processed once the request has been received.

13. What happens if I don't repay my private student loan?
If you do not repay your private student loan according to the terms disclosed on your promissory note, you may eventually be in default on the loan. If you default on your private student loan, that fact will be reported to the credit bureaus. All unpaid amounts and collection fees on your loan will become immediately due and payable. You will incur collection fees and costs, as well as court costs and attorneys fees.

Note: Default will have an adverse effect to your credit rating that may limit your ability to borrow for a car, home, or credit card now and far into the future.

14. Can my co-borrower be released from my loan?
Yes. If you have made 36 on-time payments, you may contact us to determine if your co-borrower may be released from their obligation.

15. Are there any prepayment penalties?
No. Payments on your private student loan may be prepaid at any time without penalty.

16. Can I make payments through direct debit?
Yes. You’ll receive a .25% rate reduction on your interest rate when you do.

17. Can I pay my private student loan off early?
Yes. There is no prepayment penalty.