Uncertified Student Loans: What They Are and When to Use Them

Uncertified student loans provide an alternative source of education funding when traditional student loans fall short. Unlike certified loans, which schools verify based on the cost of attendance, uncertified loans allow borrowers to access additional funds without school approval. These loans can help cover expenses beyond tuition and housing, but they often come with higher interest rates and fewer borrower protections.

This guide explains how uncertified student loans work, who offers them, and when they might be a suitable option.

Table of Contents

1. What is an uncertified student loan?
2. Who offers them?
3. Should you take out an uncertified student loan?
4. Steps to follow when taking out student loans
5. Pros and cons
6. FAQ

What is an uncertified student loan?

An uncertified student loan is a private loan that does not require school certification before approval and disbursement.

Traditional student loans—whether federal or private—are certified by schools to ensure students borrow only what they need based on the cost of attendance (COA). In contrast, uncertified student loans allow borrowers to take out more than the school-certified amount, offering flexibility but also increasing the risk of overborrowing.

These loans function similarly to personal loans: Funds are sent directly to the borrower rather than the school. However, unlike personal loans, some uncertified student loans may still require proof of enrollment.

Here’s how uncertified student loans (uncert.) compare to other borrowing options:

Feature	Cert.	Uncert.	Personal loan
Tax-deductible interest?	✔	✖	✖
Can be used for education costs?	✔ (up to COA)	✔ (can exceed COA)	✖
Funds disbursed to borrower?	✖	✔	✔

Who offers uncertified student loans?

Fewer lenders offer uncertified student loans than traditional student loans. Some banks and online lenders provide them as a last-resort option for borrowers who have exhausted other funding sources. However, many major banks, such as Chase and Bank of America, have stopped offering uncertified student loans.

Instead, some online lenders and credit unions may offer uncertified loans to borrowers with strong credit histories or a creditworthy cosigner. Because these loans function similarly to personal loans, some borrowers opt for a personal loan instead—though personal loans often lack student-friendly repayment terms.

If you think a personal loan might make more sense, check out our resource on the best personal loan lenders. Credible is an excellent option that lets you submit one application and compare actual offers from multiple lenders—all at no cost to you.

Should you take out an uncertified student loan?

Uncertified student loans can be useful in certain situations, but we only recommend considering them after exhausting all other options.

You might need an uncertified loan if:

• You’ve maxed out federal and certified private loans: If federal and private student loans don’t cover all your expenses, an uncertified loan may be your only option.
• Your school isn’t eligible for traditional student loans: Some vocational, international, or non-accredited programs don’t qualify for certified student loans.
• You have additional education-related costs: If your school doesn’t include expenses such as child care, professional exams, or off-campus housing in its COA, an uncertified loan can help.

Steps to follow when taking out student loans

If you need to borrow money for school, follow this order of operations to minimize debt and secure the best loan terms:

1. Apply for federal student loans

• Complete the Free Application for Federal Student Aid (FAFSA) to access federal loans, grants, and work-study programs.
• Federal loans might have lower interest rates, especially for those with less-than-perfect credit—and they offer borrower protections, including income-driven repayment and loan forgiveness programs.

2. Look into state and private student loans

• Some states offer student loans with lower rates than private lenders.
• Private student loans are available if you need more funding, but the best private student loans require a credit check and often a cosigner.

3. Consider uncertified student loans only if necessary

• If federal and certified private loans aren’t enough, compare uncertified student loan lenders and personal loans to find the most favorable terms.
• Avoid borrowing more than necessary to prevent excessive debt.

Pros and cons of uncertified student loans

Here are several benefits and drawbacks of uncertified student loans:

Pros

• No borrowing limit based on the school’s COA

  Can cover expenses beyond tuition and standard living costs.

• Direct fund disbursement

  Money goes straight to you rather than the school.

Cons

• Higher interest rates

  Uncertified loans often have higher costs than certified student loans.

• Limited repayment options

  Don’t offer income-driven repayment or forgiveness programs.

• Tougher eligibility requirements

  Often require strong credit or a cosigner to qualify.

FAQ

How do I qualify for an uncertified student loan?

You generally need good credit and proof of income to qualify. If you don’t meet the lender’s requirements, a cosigner with strong credit can improve your chances.

Can I use an uncertified student loan for something other than tuition?

Yes. Unlike certified student loans, uncertified loans can cover living expenses, travel, and other education-related costs your school may not include in its COA.

Are personal loans considered uncertified student loans?

No, but they work similarly. Personal loans can be used for education, but they lack student-friendly repayment terms and aren’t tax-deductible like student loans.

Can I take out both certified and uncertified loans?

Yes. Many borrowers use federal loans first, then certified private loans, and finally uncertified loans if additional funding is needed.