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Alternative Loans

Alternative loans are not for everyone. You should only seek to borrow an alternative loan after other types of financial aid have been exhausted. Your eligibility is determined by the cost of attendance minus other financial aid or the annual loan maximum amount as determined by the lender.
Because alternative loans are not guaranteed by the federal government, they must be insured privately. This extra cost is passed on to the borrower in the form of higher fees and interest rates. In addition, the lender will look at your credit history as well as other factors to determine if they will lend to you. You may be denied by one lender and approved by another because of the different ways the lender interprets your information.


Eligibility requirements vary from lender to lender. Most alternative loans require a co-signer for the loan if your credit history and annual income do not meet the lender's standards. In addition, you may be required to meet citizenship requirements or provide a co-signer who meets citizenship requirements. You must be admitted and enrolled in at least half time in a degree seeking program. Other eligibility requirements may apply depending on the lender. You are urged to choose a lender after researching the lenders terms and requirements.


  • Before applying, students should consider federal loans since interest rates are usually lower and repayment options are flexible. See the difference between federal and alternative loans here
  • There are a number of lenders who provide alternative loans.  The university has developed a system-wide common lender list based solely on factors related to the borrower's best interest: financial terms of the loan, loan features and the quality of service.  The UC Lender List provides you with our recommended options. 
  • If you have not heard from our office with an update to your loan within 2 weeks of being approved for your alternative loan please contact us

Normal Processing Time

Normal processing time for the loan funds to disburse to your student account is 3-5 weeks, after our office has sent the certification request back to your lender. Please continue to monitor your UC Merced email and reply when necessary to any emails our office may send you regarding the loan. Not responding when necessary will delay the processing of your loan.

More Information

The State of California requires that you be told the following: Students should consider exhausting federal student loan eligibility before contemplating the use of private student loans.  Apply for federal student aid, which includes federal student loans, grants and work-study; by submitting the Free Application for Federal Student Aid (FAFSA) online.
Students considering student loans need to be aware of the differences between federal student loans and private student loans:

  • Federal student loans are required by law to provide a range of flexible repayment options including, but not limited to, income-based and income-contingent repayment plans as well as loan forgiveness benefits that private lenders are not required to provide.
  • Federal direct loans are available to most students regardless of income.  Other qualification criteria do apply.  For more information, please visit
  • Private student loan lenders can offer variable interest rates that can increase or decrease over time, depending on market conditions. 
  • The interest rate on a private loan may depend on the borrower’s and/or co-signer’s credit rating.
  • Private student loans have a range of interest rates and fees and students should determine the interest rate of, and any fees associated with, the private student loan included in their financial aid award package before accepting the loan.  Students should contact the private student loan lender if they have any questions about interest rate, fees, repayment terms, etc.. 

UC Merced is not involved in the Alternative Loan credit decision. All credit decision questions should be directed to the loan lender. Financial aid eligibility applies to all certifications of loan amounts. All borrowers must complete a self-certification form prior to receiving a private student loan with lender (provided upon request to loan applicant).