Private Loans

Although you may finance the up to the full cost of attendance using federal student loans, you may research alternative student loan options through private lenders. The University of Virginia Darden School of Business neither encourages nor discourages researching and applying for private student loans. While Federal loans typically offer safety nets not found with private loans, we encourage you to carefully research and consider all your available loan options.

Researching Private Loan Options

  • Consider contacting lenders or other financial institutions with which you already have a working relationship
  • Check your credit report and resolve any issues you may find quickly: you can get a free credit report from each of the three credit reporting bureaus each year at
  • Resources to help search for private loans:

Things to Consider

  • While fixed interest rate private loans are available, private student loans are typically floating interest rate loans based on the Prime Rate or LIBOR
  • Interest rates and fees are determined by individual lenders based on the borrower's credit score and credit history
  • Repayment terms vary by lender and can range from 10 to 25 years
  • The ability to pre-pay without penalty is determined by individual lenders
  • Private loans typically cannot be consolidated with one-another, and cannot be consolidated with Federal loans
  • Compare the differences between Federal and private student loans on the Federal Student Aid website

Questions to Ask Yourself

  • How important is it to have the lowest interest rate interest possible?
    Depending on your credit score, credit history, and whether or not you have a cosigner, private loan interest rates and fees may be comparatively better than Federal loans
  • Will I ever need an alternative repayment option?
    For borrowers who may find themselves financially over-burdened by their monthly loan payments, Federal loans offer safety nets not found with private loans, such as multiple alternative repayment options, and typically more generous deferment and forbearance terms
  • How quickly do I expect to repay my loans after I graduate?
    Not all private loans allow for penalty-free pre-payment; additionally, for borrowers of floating interest rate private loans, the potential for interest rates to rise over time means borrowers who take longer to repay their loans also take on greater risk that payments will increase over the lifetimes of their loans. 

Questions to Ask Lenders

  • Is the interest rate fixed or variable? If it is fixed, what is the maximum rate? If it is variable, how often will it change and how high could it go?
  • Are there any application, origination, disbursement or repayment fees?
  • Is a cosigner required? Will having a cosigner lower the interest rate, and can my cosigner be released during the repayment term?
  • Is there a grace period between graduation and when repayment begins?
  • When is accrued interest capitalized (added to principal balance)?
  • How long is the repayment period, and are there pre-payment penalties for paying a loan off earlier than the standard term?
  • Are payments deferred while I am still in school?
  • Is there an in-school deferment option if I graduate and choose to enroll in another graduate degree program in the future?
  • What type of hardship deferment or forbearance options are there?
  • Are there any borrower benefits, such as an interest rate reduction for signing up for auto-debit or by making a certain number of on-time payments?

Applying for Private (Third-Party) Loans

If you are applying for both federal and private loans, you should follow steps 1-4 of the federal loan application process simultaneously.

Step 1: Apply for a Private Loan

  • You must apply for private loans directly with the lender(s) of your choice. Private loans will require an application and credit approval, completion of a promissory note, completion of a self-certification form, and possibly other requirements specific to your chosen loan and/or lender. Check with your lender to make sure you are aware of and understand all requirements.
  • If you are applying for a Private Loan for the fall and spring semesters, you will not receive the full amount of your financial aid budget. Since financial aid costs are higher for the fall semester, you will need to apply for a second loan to cover the increased costs for this semester. Please contact the Darden Financial Aid Office with questions regarding this process.
  • Your loan application may cover the cost of attendance for the first year of the program. You will need to reapply in summer of 2015 for loans to cover the costs of your second year.

Step 2: Inform the University of Your Borrowing Choice

  • If you have also applied for federal loans, the University cannot certify your private loan until you have made accept/decline decisions on your financial aid package for any federal loans offered. Follow step 4 in the above-detailed federal loan application instructions.
  • If you are only applying for private loans you do not need to file a FAFSA or UFAA, but must inform the Darden Financial Aid Office that you will not be applying for federal loans. You can do so by sending an email from your UVA email account to, or by faxing/mailing/bringing a signed statement to the Darden Financial Aid Office.

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