Tips for Student Borrowers

Own Your Loan

Ask your lender questions, you are responsible for knowing what type of loan you are applying for and what the terms of the loan agreement as well as the repayment process. We highly recommend that you apply for financial aid using the Free Application for Federal Student Aid (FAFSA) before you apply for an alternative loan. More information about the Direct Loans can be found on our loans page.

Be Mindful of Credit Checks

When initially applying for a loan, your credit will be checked.  Depending on the lender, the credit check will be valid for a certain length of time.  If another loan is applied for within this time period, another credit check is typically not needed. Check with your lender to be sure.

Shop Interest Rates

Federal student loans (subsidized or unsubsidized) can often have lower interest rates than alternative loans. Be sure to know all the possible interest rates available so that you are getting the best deal for you! Alternative loan interest rates are based on credit history and may require a cosigner for students with limited credit history.

Know Your Repayment Options

Federal student loans and alternative loans will have different repayment options. Learn about the differences so that you can choose which one will work best for you.

For more information on loan repayment, review the FAQs section about Repaying Your Student Loans on our Loans page.

Preferred Lender Lists and Preferred Lender Arrangements

Texas A&M University conducts a biennial Request For Information for private (non-federal) loans, sometimes referred to as "alternative" loans. Lenders on the Preferred Lender List are selected based on the Request for Information. 

Lenders are reviewed comparatively but not limited to the following criteria: customer service, financial literacy, product, variety, accessibility, and process. Borrowers are encouraged to compare the services and products that are provided by lenders and choose the private lender that best suits their individual needs. Students are free to choose any lender for their alternative loan, even those not included on the Preferred Lender List.

Questions to Ask Your Lender

• Is the interest rate variable or fixed? 
  • A variable interest rate can change, but a fixed interest rate will stay the same as long as you have the loan.
• Is the interest capitalized? 
  • If it is, the amount of money you ultimately owe increases as the interest accrues over time.
• Is there an origination fee? 
  • Origination fees are charged by some lenders to cover their cost to process your loan.
• Are there fees for paying off the loan early?
• Are there any borrower benefits? 
  • For example, some lenders may offer a discount on your interest rate if you sign up for automatic monthly payments.
• When do you need to start repaying the loan? 
  • Some lenders require you to pay while you are in school. Others will defer payments until after graduation.
• Is a co-signer required? 
  • Many students have no credit history and the lender may require a co-signer on the loan. The lender will inform the students during the application process.
• Are there other eligibility requirements? 
  • Some lenders require students to be Texas residents, enroll in full- time hours, and/or meet Satisfactory Academic Progress.