Credit Based Loans

Before applying for a private, credit-based loan we encourage you to explore all your financing options:

  • Federal Direct Unsubsidized Student Loan – If you qualify for Federal financial aid you should always look to utilize Federal Direct loans first. Eligibility is not based on credit but rather your previous borrowed amounts up to the annual and/or aggregate Federal loan limit. The terms and rates are generally better than credit-based loans. Be sure you have been awarded the full amount allowed before pursuing other loans.
  • Federal PLUS Loan – The student is the borrower of this Federal credit-based loan. Unlike the Parent PLUS loan a parent may have utilized when you were undergraduate student, the Graduate PLUS is solely in the student’s name.  Eligibility is based on the PLUS Loan Credit Criteria which is less stringent than the credit criteria used by most private loan lenders. At 8.05%, the PLUS Loan interest rate may be higher than the rate you may qualify for through a private lender. Also, the PLUS Loan requires a 4.228% origination fee; most private lenders do not require fees.

We urge you to compare credit-based loan information and terms carefully to determine the best fit for your particular circumstances and we suggest using to do so. Credible is a free online loan selection tool that allows you to compare prequalified rates*, terms, and eligibility rules side-be-side in just a few minutes. You can filter your search to sort on key factors most important to you. With your approval, Credible will pull a soft credit inquiry, which will not affect your credit score but will enable you to compare interest rates you qualify for at multiple lenders.

Requesting prequalified rates on Credible is free and doesn’t affect your credit score. However, applying for or closing a loan will involve a hard credit pull that impacts your credit score and closing a loan will result in costs to you. Credible assures users that it is secured with 256-bit encryption technology. The Credible privacy policy can be found here. You are not required to borrow from any of the lenders listed in the Credible marketplace. Only you can decide which loan program is best for you. You are not required to borrow from any of the lenders suggested by Credible and there is no penalty for selecting a different lender, if you prefer.

  • Medical/Dental students – Link to the Credible Residency loans page for residency loans. The Credible process will include a hard credit inquiry which will be reflected in your credit history.

If you are interested in applying for a credit-based loan, it’s advised that you do so no more than 90 days prior to the start of the enrollment period.

How to Get a Credit-Based Student Loan: Step by Step

1) Research Your Student Loan Options

Before applying for a credit-based student loan, it’s important to do your research on the private student loan landscape and explore all of the options available to you.  Visit Credible to compare lenders.

2) Understand How to Apply

Once you select a lender, you will need to complete an application.  Most private student loan applications can be submitted online and take an average of 15 minutes to complete.

3) Get an Approval Decision

After reviewing the disclosure and submitting your application, the approval process begins. Some lenders use a manual review process that could take a few days while others produce an instant decision. During the approval process, the lender evaluates your credit history, among other criteria, to determine whether to approve you for the loan.

4) Accept and Sign Your Loan Terms

Once approved, the next step is to review and accept the terms of the loan.  After you finalize the terms of your loan, you receive a second required disclosure, this time with specific information regarding rates, fees, and other terms of the loan. This disclosure shows you all of the information about your specific loan and how much it will cost. After you accept the terms of the loan, you’ll sign the remaining loan documents to continue. Most lenders will let you sign your loan documents electronically so you can skip printing and mailing.

5) Wait for School Certification

During certification, the lender will send your loan details to BU to confirm several things including your enrollment status (half-time or full-time), your anticipated graduation date, and your requested loan amount. The loan cannot exceed the cost of attendance.

BU can certify the loan as is, certify the loan with changes, or not certify the loan at all. When certifying a loan with changes, BU can lower the amount of the loan if it exceeds the maximum cost of attendance (minus other aid), or could adjust things like your expected graduation date.

If BU makes changes to the loan, your lender will often need to generate new disclosures to make sure you have the latest information. You may need to accept the new disclosure, so keep an eye out for communications from your lender.

6) Your Student Loan Provider Disburses Funds to Your School

Once your loan is certified by BU, your loan will be scheduled for disbursement. Student loan disbursement is how BU gets the funds you applied for to your student account. Credit-based student loans are typically sent straight to BU; they are not sent directly to you (the student).

In terms of how long it takes to get your student loan, BU sets the disbursement date, which is typically on the first day of class each semester.  It’s best not to wait too long to apply to avoid any unexpected delays.

Typically, your private student loan lender will inform you when your private student loan is disbursed, and will be sent to your school in 2 disbursements if you applied to cover more than one term.