Private Student Loan Guidance
Loan Guidance
Before pursuing private student loans, UIC encourages students to review available payment options, including Federal Student Loan options through the Office of Student Financial Aid and monthly payment plans through the Bursar’s Office.
UIC does not have a preferred private lender list. However, to assist you in your search, ELM Select is a lender-neutral online platform that allows students to evaluate and compare private loan details, including interest rates, repayment terms, and eligibility requirements. ELM Select displays the lenders most commonly used by UIC students during the 2024–2026 academic years.
Students may choose any lender, including lenders that do not appear on the ELM Select list. Additional private loan information can be found on the Finaid.org and AAMC webpages. UIC is not responsible for the accuracy or updating of the lender information on these websites.
Remember to carefully read the terms, conditions and requirements of any private loan. Some lenders will not approve loans for the following scenarios:
- Receiving financial aid up to Cost of Attendance (COA).
- Enrolled less than half-time
- Not meeting UIC’s Satisfactory Academic Progress (SAP) requirements.
- Owing a balance from a previous semester (Past due Balance Loan).
After approving a loan application, lenders will send a certification request to the school to verify that the amount requested does not exceed the COA and meets the lender’s requirements.
UIC will apply the loan funds directly to the student’s account once the lender disburses the funds. Loan proceeds will first be used to pay eligible university charges, including tuition, fees, and on-campus housing (if applicable). Any remaining funds will be refunded to the student by the University Bursar.
Private Student Loan Borrowing Tips:
- Compare private lenders and loans.
- Know your interest rate. Interest rates vary depending on the lender, your credit score, and other factors.
- Interest rates can be fixed or variable.
- Know your deferment options while in school and beyond.
- Know your repayment terms and options.
- Private loans are considered a financial aid resource. Private loans plus other financial aid that you are receiving cannot exceed your cost of attendance.
- Private student loans that you borrowed will appear on your credit report.
1. Use AnnualCreditReport.com (Official and Free)
- What it offers: Free credit reports from all three major bureaus: Equifax, Experian, and TransUnion.
- Frequency: You’re entitled to one free report per bureau per year (but can access them weekly through December 2026).
- What it doesn’t show: It does not include your credit score, just your detailed credit history.
Use this to:
- Check for errors, fraud, or missed payments.
- See all open accounts and credit inquiries.
2. Get Your Credit Score for Free
Credit Card Issuer or Bank
Many banks and credit cards offer free FICO or VantageScores to their customers. Check your online banking or credit card dashboard. Popular providers:
- Discover Credit Scorecard (open to anyone, not just customers)
- Capital One CreditWise
- Chase Credit Journey
- American Express MyCredit Guide
Credit Monitoring Sites
These offer free credit scores (usually VantageScore, not FICO) and tools to track your credit:
- Credit Karma (TransUnion + Equifax)
- Credit Sesame
- WalletHub
Use this to:
- Check your score range.
- Monitor factors like payment history, credit utilization, and age of credit.
3. Look for Errors and Improve Your Score (if needed)
Before applying:
- Make sure all info is accurate and up to date.
- Dispute any errors through the bureaus.
- Pay off any lingering debts or bring accounts current.
Even a small increase in your score could help you:
- Qualify for a lower interest rate.
- Avoid needing a cosigner or improve your chances of finding one.
Quick Tips for Medical Students
- Check your credit at least 2–3 months before applying for a private loan.
- Aim for a credit score of 670+ to qualify on your own, and 720+ for the best rates.
- Don’t apply for multiple loans at once; it can lead to hard inquiries, which may temporarily lower your score.
Choosing the Right Student Loan Cosigner
Choosing a cosigner for a private student loan as a medical student comes with unique considerations because of the high cost of medical school and the potential for high future income.
1. What to Look for in a Cosigner
Excellent Credit Profile
- Aim for a FICO score above 720 for the best interest rates.
- Clean credit history with no missed payments, delinquencies, or bankruptcies.
High and Stable Income
- Medical school loans can total $200,000+, so the cosigner should have a strong income, often $50,000 to $100,000+, depending on the loan amount.
- Lenders assess the cosigner’s ability to repay if you cannot.
Low Debt-to-Income Ratio
- Even if income is high, a high level of personal debt (mortgage, car loans, etc.) can hurt their eligibility.
- A DTI (debt-to-income) below 40% is often preferred.
Willingness to Commit Long-Term
- Medical students often don’t start earning for 4–8 years (school + residency).
- The cosigner needs to be comfortable with this long timeframe before potential cosigner release.
Close Relationship and Trust
- Usually a parent, guardian, or financially responsible relative.
- Must understand that if you default or delay payments, you are fully responsible.
2. Important Topics to Discuss with a Potential Cosigner
- Your financial plan (school costs, living expenses, estimated debt).
- Your career timeline (when you’re in residency, when repayment starts).
- Cosigner release options (some lenders allow release after 12–48 months of on-time payments, but not all do).
- How missed payments will impact their credit.
- Contingency plans in case of hardship or unexpected events.
3. Lender-Specific Considerations
When choosing a cosigner, also look at lenders that:
- Offer cosigner release.
- Allow deferment during residency/fellowship.
- Have low fixed or variable interest rates for cosigned loans.
- Offer medical school-specific loans (e.g., Sallie Mae, Discover, Laurel Road, College Ave).
4. Red Flags
Avoid using someone as a cosigner if:
- They’re near retirement and may need to borrow for themselves.
- They don’t understand the legal or financial responsibility.
- They have unstable income or high personal debt.
- The relationship could be strained by future financial stress.
1. Start With the School’s Published COA
UIC medical school publishes an annual COA. This includes:
Direct Costs (billed by the school):
- Tuition
- Mandatory fees (technology, student services, clinical fees)
- Health insurance (if you waive, this cost may drop)
Indirect Costs (not billed but still real):
- Housing (rent, utilities)
- Food
- Transportation (public transit, gas, parking, car insurance)
- Books and supplies (stethoscope, scrubs, exam prep materials)
- Personal expenses (phone bill, toiletries, laundry)
- Board Exam costs (USMLE Step 1/2)
- Residency interview travel (MS3–MS4)
Most students only look at the tuition line. That’s a mistake—your indirect costs often create the borrowing need.
2. Break Down the COA by Semester
This is important because your school disburses aid each semester, not all at once.
For example:
Annual COA = Resident $89,195, Non-Resident $123,095
- Fall = Resident $31,641, Non-Resident $42,941
- Spring = Resident $31,641, Non-Resident $42,941
- Summer = Resident $25,913, Non-Resident $37,213
Within each term, you need to know:
- When is tuition due
- When your refund hits
- How long must that refund last
This helps you avoid running out of funds three months into a semester, which is a common issue for medical students.
3. Break It Down Again: This Time Monthly
This is where you finally “see it.”
Take the indirect costs* and convert them into a monthly budget:
*The figures are estimated based on the living expenses in the cost of attendance
- Rent: $1,500
- Food: $500
- Transportation: $179
- Books & supplies: $175
- Personal expenses: $400
- Step exam savings fund: $56
Monthly living cost = $2,810
Multiply by the number of months in your academic term (12 months).
Annual living cost example:
$2,810 × 12 months = $33,720
This number alone explains most borrowing needs.
4. Compare Your Monthly Need to Your Aid Refund
Your financial aid refund may seem like a substantial amount, but you need to consider how long it must last.
Example:
Fall refund = $12,000
Fall months = 5 months
Monthly coverage = $12,000 ÷ 5 = $2,400
If your monthly budget exceeds the refund amount, you have a shortfall.
5. Account for Irregular Medical School Costs
Medical school is not evenly priced year-to-year:
- M1 & M2: Heavy academic supplies and board prep costs
- M3: High transportation (clinical rotations), increased food expenses, fewer opportunities to work
- M4: Residency applications, travel, possible relocation
Add a “sinking fund” each month so the hit doesn’t push you into emergency borrowing later.
Example:
Residency application fund saved monthly: $75–$150 over M3/M4 years.
6. Look for Areas Where You Can Reduce Costs
Once your monthly breakdown is visible, you can ask:
- Can housing be shared?
- Can transportation be reduced?
- Can meal prep lower food expenses?
This matters because every $1 you don’t need to borrow is $2–3 saved over the life of the loan.
7. Identify Your Cash-Flow Gap
After all calculations, you’ll see one of three outcomes:
- You have enough federal aid to cover your needs
- You have a small gap that can be fixed by budgeting
- You have a significant gap that likely requires a private loan
Knowing the size and timing of the gap is what allows you to borrow responsibly.
1. Confirm You’ve Exhausted Federal Options
Private loans should only come after:
- FAFSA is completed
- Direct Unsubsidized Loans are accepted
Federal loans offer protections (fixed interest rates, IDR plans, deferments, forgiveness) that private lenders don’t.
2. Calculate the Exact Amount You Need
Use your financial aid notification to determine the smallest amount necessary:
- Compare your cost of attendance (COA) with your current aid
- Identify the gap
- Confirm the amount with your school’s financial aid office if you’re unsure
Schools will not certify an amount that exceeds COA.
3. Check Your Credit and Decide If You Need a Cosigner
Private loans are credit-based. Steps:
- Pull your credit report (free annual report)
- Check your credit score
- Evaluate whether your income supports repayment
Most medical students will require a cosigner to qualify or get a reasonable interest rate.
4. Shop Around and Compare Lenders
Never apply to the first lender you see. Compare:
- Interest rates (fixed vs. variable)
- In-school deferment options
- Residency deferment options
- Forbearance policies
- Fees (origination, late, prepayment)
- Cosigner release availability
Check at least 3–5 lenders.
Tip: Many lenders will allow you to perform a soft credit check to estimate rates before applying.
5. Start the Application on the Lender’s Website
You (and your cosigner if applicable) will provide:
- Personal information
- Social Security number
- School name and program
- Expected graduation date
- Loan period (e.g., Fall 2026–Spring 2027)
- Requested loan amount
- Housing plans (often affect COA)
Most applications take 15–30 minutes to complete.
6. Submit Required Documentation
Lenders may ask for:
- Government ID
- Proof of income for you or your cosigner
- Enrollment verification (sometimes the school handles this)
- Financial aid award letter
Your cosigner may need to provide pay stubs, tax returns, or proof of employment.
7. Lender Performs a Hard Credit Check
Once you choose to proceed, the lender will make a hard inquiry.
This finalizes:
- Your eligibility
- Interest rate
- Loan terms
At this point, you typically receive conditional approval.
8. School Certification
This is where most students tend to get confused, but it’s essential.
How certification works:
- The lender sends your school a request.
- The school verifies:
- You’re enrolled
- The loan amount is within your COA
- Your loan period matches your enrollment
- The school either approves, adjusts, or denies the amount.
Certification can take 1–3 weeks, depending on the time of year.
9. Final Loan Approval and Disclosure
Once the school certifies the loan:
- The lender issues final disclosures
- You sign the promissory note
- Your right-to-cancel period (usually 3–7 days) begins
Review the interest rate, fees, and repayment terms carefully to ensure you understand them fully.
10. Funds Disbursed to the School
Funds are sent directly to the school, not to you.
The school applies the funds to:
- Tuition
- Fees
- Other direct charges
If there is a credit balance, the school refunds the remaining amount to you for living expenses.
How Long Does the Process Take?
On average: 3–5 weeks
Faster if:
- You have a strong cosigner
- You submit documents quickly
- Your school certifies loans fast
Slower if:
- It’s July–September (peak volume)
- You request more than your COA
- Your lender or school needs verification
1. Open a Secured Credit Card
- You pay a deposit (e.g., $200–$500) which becomes your credit limit.
- Use it for small purchases (like gas or groceries) and pay it off in full every month.
- Recommended cards: Discover it® Secured, Capital One Platinum Secured.
Impact: Starts building positive credit history within 1–2 months.
2. Become an Authorized User on a Parent's or Trusted Person’s Card
- You get added to someone else’s credit card account.
- Their payment history and credit utilization can help your credit file—if they have good credit.
- You don’t even need to use the card.
Impact: Can improve your credit file in as little as 30 days.
3. Pay All Bills on Time (Even Non-Credit Bills)
- Some services report rent, utilities, or phone payments to credit bureaus (e.g., Experian Boost).
- Set up autopay to avoid missing due dates.
Impact: On-time payments are 35% of your credit score.
4. Keep Credit Utilization Low
- If you have a credit card, try to use less than 30% of your credit limit.
- Example: If your limit is $500, don’t carry more than $150 in charges.
Impact: Improves quickly, often within 1–2 billing cycles.
5. Check Your Credit Report and Dispute Errors
- Go to AnnualCreditReport.com.
- If there’s anything incorrect or outdated (especially if you have bad credit), dispute it with the credit bureaus.
Impact: Errors can be removed within 30–45 days of dispute resolution.
How Long Does It Take to Build or Improve Credit?
| Goal | Approx. Time |
|---|---|
| Establishing a score (from no credit) | 1–3 months |
| Improving a low score (under 580) | 3–6 months to reach fair/good |
| Reaching good credit (670+) | 6–12 months with steady effort |
| Qualifying for best loan rates (740+) | 12–24 months or more |