Uncertified Student Loans

This article gives details about non-certified loans or uncertified loans, their uses, advantages and disadvantages which ensures to give you a wholesome idea about uncertified student loans

Updated by Anuroop C on 27th January 2020

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A number of options are available for you to pay your college tuition fees- scholarships, grants, and loans. Federal and private loans directly pay the amount to your school, which is then refunded to you, after your tuition is paid. But the cost of attendance is an important factor to consider as well since they are a must for you to study at your school. Room rents alone could end up costing you up to $10,000 in some schools. And the cost of textbooks also have doubled since 2001 and the inflation is nowhere showing an end. But these loans only aim to cover the costs of your tuition alone. In order to help you pay out for these additional costs, uncertified student loans were brought into the picture.

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What are Uncertified student loans?

Uncertified student loans are provided by the banks directly and not into the hands of your school’s financial aid coordinator. Certified student loans only cover the cost of tuition, but uncertified student loans can help you cover the cost of attendance, such as room rents, books, etc. The amount from the certified student loans is given directly into your hands which therefore you completely hold responsible as well as the freedom to spend it.


Advantages of Uncertified Student Loans

  • You have the choice to choose your lenders.

  • You get the money directly from the lender, without it going to school and then you get refunded.

  • No limit on the amount you borrow, so you can completely cover the cost of your school’s attendance


Disadvantages of Uncertified Student Loans

  • Usually, high origination and application fees have to be paid in order to apply for an uncertified student loan.

  • A higher interest rate is usually charged for an uncertified student loan.

  • In order to qualify for these loans, you need to have a good credit score and history. In case you don’t have a good credit score, then you need to have a cosigner with a good credit score and history to qualify.

  • There are usually no benefits associated with taking loans like these. uncertified loans do not provide benefits like Federal Loans or Private Certified student loans. Federal Loans provide benefits like Income-driven loan repayment program or student loan forgiveness. Private Certified loans provide benefits like no origination or application fees, etc.

  • You can be tempted to borrow more than the amount required.


On the bottom line, uncertified loans should be considered as your last resort for your cost of attendance. As every page of your research has already said, this point cannot be mentioned too many times. Exhaust all your Federal loan options even before considering other means.  If you are still searching for student loans, you can consider the best student loans available in the market. Uncertified student loans are more comparable to personal loans, although personal loans sometimes require collateral, which is not the case under uncertified student loans. Read more on personal loans for students.

Uncertified student loans can usually be taken in order to pay for your attendance cost, but never for your tuition fees.