updated 7.5.12
Wise Borrower Questions

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When students and parents are shopping for a lender, we recommend that you familiarize yourself with the programs offered and then compare lenders by service, products offered. Although the program guidelines are set by the federal government, not all lenders offer the exact same product and service. The following questions may help you make an educated decision, especially when it comes to private and alternative loans which are not regulated by the government.

  • Which lenders offer Alternative Loan Financing?

  • What are the eligibility requirements?

  • Are Alternative Loans Credit Based?

  • Can students borrow without co-borrower?

  • What are the maximum loan limits?

  • What are the minimum loan limits?

  • Are there loan fees charged?

  • How much are the loan fees?

  • Are they deducted from loan proceeds?

  • If fees are deducted from loan proceeds, can you increase the loan to cover the fees charged?

  • What is the interest rate charged?
    • Does the interest rate change when entering the repayment cycle?
    • Are fees accessed to the loan if interest and principal are deferred during in school period?

  • Does the loan offer a grace period?
    • How long is the grace period?

  • What is the interest rate?

  • What is the APR rate?

  • How long can the loan be repaid?

  • What types of interest incentives are available for prompt payments?

  • Does the lender offer ACH rate reduction for electronic payments?

  • Can the loan be pre-approved?
    • How does the pre-approval work (ex. By telephone? By fax?)

  • What is the application process?

  • What is the loan disbursement process?

  • Does the loan offer line of credit options?

  • What types of loan deferments are available?
    • Can you defer principle and interest?
    • Can you defer principle only?
    • Can you immediately repay the loan?

  • What types of repayment options are available?

  • Can non-matriculated students borrow?




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The information presented on the NYSFAAA Website is provided as a service from the New York State Financial Aid Administrators Association to our constituents and represents our best efforts to assist students and their families in pursuing funding for higher education. NYSFAAA is a volunteer association of financial aid professionals representing the various institutions of higher education in New York State. We have collected information we believe to be important and reputable in finding and obtaining financial aid resources; however, we assume no liability for the use of this information.

The New York State Financial Aid Administrator’s Association, Inc (NYSFAAA) does not receive any money, gifts or compensation, related to educational lending activities, from any “lending institution” as defined in S620(8)a and S620(8)b of New York State Education Law. Hence, NYSFAAA does not meet the definition of “lending institution” as defined in S620(8)c of New York State Education Law. Therefore, institutions of higher education in New York and employees of those institutions are not subject to any potential conflicts of interest or legal restrictions under NYS Education Law in their interactions with NYSFAAA.*

* This statement does not constitute, and should not be construed as, legal advice.