Private Loans

Private student loans are offered through a variety of banks and other lenders. Students wanting private loan must apply separately from their financial aid application through an individual lender. The best rates on these loans are generally offered to borrowers with good credit and/or who have a cosigner with good credit.

When shopping for a private loan, look for a loan you can live with in both the short term and long term. You may be repaying it for multiple years after graduation. Many loan providers will lend up to the student’s cost of attendance minus any financial aid received. Often there is a yearly and/or cumulative cap on the amount the student may borrow; sometimes this cap is set by the student’s school. Note that it takes an average of 4 weeks to process loans through our office.

Private Loan Eligibility, Loan Terms, and Requirements

Eligibility Criteria

Loan Terms

Additional Information/Requirements


Student must be enrolled at least half-time in degree program

Borrower must be a U.S. citizen or eligible noncitizen

Borrow may be required to have a cosigner 

Fees from 0-12%, depending on borrower’s credit. Some have origination fees.

Loan amounts often are cost of attendance minus financial aid offered. Sometimes set by school. Often include a yearly and/or cumulative cap (as high as $250,000 for undergraduates).

Interest rates generally PRIME -1% to +7.75% or LIBOR +1% to +8%

Repayment term ranges from 0-25 years, depending upon amount of loan

Interest rates, fees, and loan limits depend upon borrow/cosigner credit history, loan options, and repayment schedule. Having a cosigner may reduce interest rate and loan fees

Students do not need to submit a FAFSA if they are not applying for other aid.

The federal Truth in Lending Act requires students to submit a Private Education Loan Self-Certification Form to their lender.

Borrower Requirements and Cosigners

Most lenders require half-time student enrollment. Our staff checks enrollment status when a loan is disbursed, not when the loan is certified. Many private education lenders also require student borrowers to have a loan cosigner.

In addition to increasing your chances of getting your loan approved, having a cosigner sometimes helps you get a lower interest rate and may reduce the approval time. Your cosigner need not be a relative, but should be someone with a steady income and a good credit history. Some lenders will release the cosigner from the loan if the student borrower has met certain requirements, such as making payments on time

Typical Private Loan Payments – Graduate Students

Interest RateAPR MonthlyPayment
Prime +0.00%8.10%$80.82
Prime -0.50%7.62%$77.13

Note: This APR example is based on borrowing an $8,000 graduate loan with a 27-month deferral period followed by a 240-month repayment period. The Prime Rate is assumed to be constant at 8.25%. Interest rates indexed to the Prime Rate as published in The Wall Street Journal will vary. The APR will increase if the Prime Rate increases and would result in a higher monthly payments, an increase in the number of scheduled payments, or both.


Wolverine Access > Campus Finances > Financial Planning Calculator > Calculate Private/PLUS Loan Eligibility

Select Calculate Private/PLUS Loan Eligibility to see how much you would be able to borrow through a private loan program or through the federal PLUS Loan program. (This calculator is not available for the spring and/or summer terms.)

How to Find and Apply for a Private Loan

If you are considering borrowing through a private lender, we encourage you to:

  • Exhaust all other possible sources of financial aid first, including federal loans and Work-Study.
  • Reduce your expenses and borrow only what you need.
  • Ask questions and compare rates and terms offered by different lenders.

If you pursue a private loan, apply directly through the lender you select. Choose any lender and the university will certify your application.

To browse a selection of approved lenders, please visit the University of Michigan’s FASTChoice Private Education Loans  site.

For International Students please visit the International Student section of iMpact

Please note that U of M has not endorsed these programs, but is making the information available to you. The university does also adhere to the Code of Conduct for Student Loans that prohibits inducements or incentives by private lenders.

The Ross School of Business Office of Financial Aid is a satellite office of the University of Michigan Office of Financial Aid.