Applying for an Education Loan
Yale University provides a Lender List to students and parents who are interested in obtaining a Federal or private/alternative loan. It is the goal of Yale University Student Financial Services to provide students and parents with information regarding lenders who offer borrowers the best combination of borrower benefits, customer service, lender stability and technology, default aversion initiatives and loan terms.
To determine which lenders would be included on the Yale University 2009-2010 Lender List, Yale contracted with Student Lending Analytics to prepare a Request for Information (RFI) to be distributed to a large and diverse group of lenders. The RFI was designed so that Yale University could identify and recommend a group of lenders and loan products. Student Lending Analytics provided independent research and advisory services to assist in selecting the best lenders for our borrowers.
Students and parents are by no means obligated to select one of these lenders. In keeping with Yale policy and federal requirements, we will process the documents required for you to obtain a loan from any eligible lender you select.
Application Instructions
Please follow the instructions below depending on the type of loan for which you are applying.
Federal Stafford Loan Application Instructions
New Borrowers: Notify your financial aid office after selecting your lender. You will be notified to complete the Stafford Loan Master Promissory Note on the lender website once the school certifies the loan. You will also need to complete the Federal Loan Entrance Counseling Session required for all first-time
Continuing borrowers will only need to complete a new promissory note if they choose a new lender.
Federal Grad PLUS Loan Application Instructions
New/First-time Borrowers: Choose a lender and go to their website to apply for the loan. Receive credit approval and complete the PLUS Loan Master Promissory Note electronically. If you choose not to complete the application on the web, you will have the option to print out and complete a paper promissory note. After the application process is completed, Yale will receive notification from the lender when the loan is ready to certify.
Continuing/Prior Borrowers: Continuing PLUS loan borrowers who borrow for the same student from the same lender as the prior year, will go to the lender website or call the lender to apply for the loan and receive credit approval. You will not need to complete a new promissory note unless you choose a new lender or if the loan is for a different student. If you choose a new lender, follow the instructions for New/First-time Borrowers.
Alternative/Private Loan Application Instructions
You may want to consider a private student loan if you need additional funding for educational expenses, and only after you have exhausted all potential scholarships, federal grants, work-study funds and federal loans.
Private student loans are offered by private lenders, such as banks and credit unions. Unlike federal student loans, which are guaranteed by the federal government, private student loan terms vary from lender to lender. It is important to ask questions when deciding to borrow a private loan so that you can compare the terms and choose the best one to fit your needs.
Application process
Collect all the information that you need prior to starting the process. You may need references when completing the loan application.
Identify a co-borrower who will strengthen your application. Given the current credit environment, having a creditworthy co-borrower can be critical in getting your loan approved. Even though one may not be required, you may want to consider a co-signer with a strong credit history willing to take on that responsibility. This will make a difference in the pricing of your loan.
Plan on applying for up to 3-4 different private loans. Research shows that it pays to compare as interest rates can vary as well as fees based on your and your co-borrower’s credit scores. Please note, however, that applying for more than one loan can negatively impact your credit score if you never follow through with borrowing. When “rate shopping," if you complete at least one of the loan application processes within 30 days, the inquiries will not affect your score.
After choosing a lender, complete the promissory note electronically on the lender’s website. The lender will then notify Yale of the pending loan application and the school will certify the loan.
Private Loan Terms
Credit-based: Interest rate will be based on your and /or your cosigner’s credit. The better your credit rating is, the lower your interest rate will be.
Variable interest rate: The interest rate is subject to change and the rate may go up or down based on changes in the market.
Payment term: The length of time you have to repay the loan. The lender sets the repayment term. Some lenders may give a grace period after leaving school of several months before repayment begins.
Interest accrual: Interest starts to accrue as soon as the loan is disbursed. This has a large impact on the total loan cost. Lenders may have different terms for capitalization of interest (adding the accrued interest to the principal). Some may capitalize interest quarterly, some once a year and others may do so only after the borrower has left school.
