Choosing a Stafford Loan Lender

[TMP-SMX]

I was going to go with Chase last year because they were originally without any fees but they added them. As for Sallie Mae, a lot of people here have had bad experiences dealing with them. Discover is pretty new so nobody can really say how repayment will go or anything else but I don't think it makes much difference.

---

Members don't see this ad.

 

[Guile]

I was going to go with Chase last year because they were originally without any fees but they added them. As for Sallie Mae, a lot of people here have had bad experiences dealing with them. Discover is pretty new so nobody can really say how repayment will go or anything else but I don't think it makes much difference.

Do you know offhand if Discover has the 0.25% IRR for auto-payment? I believe that Chase and Sallie Mae do. That might make them worth the fees in the long run if Discover doesn't have any IRRs.

 

[TMP-SMX]

Yes from here:
"0.25% repayment interest rate credit when payments are set up for automatic debit from a bank account"

Of course no guarantee any of these lenders will give us our incentives when it comes down to it.

 

[PlAnEjaNe]

did anyone else notice that on discover's website they list the grad plus loan interest rate at 8.25% instead of the 8.5% that every other lender else has? is this true or is it just an error on the website? i would like to know because if it really is 8.25% and we get the .25% reduction at time of repayment with automatic payment setup then the interest rate will be 8.0%...which is really sweet, esp if i am looking to consolidate at that time.

-pj

 

[TMP-SMX]

That is their rate as of right now. If your school only participates in FFEL (not direct) then I don't think there is another lender with these up front terms.

 

[phungy]

I recently heard that Discover's unsubsidized loans capitalize on interest while other lenders like Citi do not. Anyone know about this? We may owe more to Discover than with other lenders.

 

[TMP-SMX]

I recently heard that Discover's unsubsidized loans capitalize on interest while other lenders like Citi do not. Anyone know about this? We may owe more to Discover than with other lenders.

No as posted in the other thread. Discover capitalizes at repayment after graduation like all lenders.

 

[koercive]

Chase:
For subsidized undergraduate Stafford loans first disbursed between July 1, 2009, through June 30, 2010, the statutory interest rate will be 5.60%

Lower than Discover's 6.00%. I might go with Chase and just pay the origination fee which will be .50%

 

[TMP-SMX]

Chase:
For subsidized undergraduate Stafford loans first disbursed between July 1, 2009, through June 30, 2010, the statutory interest rate will be 5.60%

Lower than Discover's 6.00%. I might go with Chase and just pay the origination fee which will be .50%

You sure Discover isn't reducing the rate for next year? I'm pretty sure they just haven't updated their page. The 6% is for the 2008-2009 school year. All Stafford undergrad subsidized loans drop to 5.6% for next year. Not just Chase.

 

[cougarY]

You sure Discover isn't reducing the rate for next year? I'm pretty sure they just haven't updated their page. The 6% is for the 2008-2009 school year. All Stafford undergrad subsidized loans drop to 5.6% for next year. Not just Chase.

Where does it say on Discover's site that it will be 6%? I've looked but can't find it.

 

[TMP-SMX]

Where does it say on Discover's site that it will be 6%? I've looked but can't find it.

Here under Subsidized Undergrad Staffords

 

[xangelx]

The actual difference is minimal. Say, borrowing max unsubsidized of $24500- origination fee paid would be $122.50. Difference bet 6% and 5.6%= 0.04%- interest to be paid at the end of the year will be $98. You can save $24.50 even with discover

Chase:
For subsidized undergraduate Stafford loans first disbursed between July 1, 2009, through June 30, 2010, the statutory interest rate will be 5.60%

Lower than Discover's 6.00%. I might go with Chase and just pay the origination fee which will be .50%

 

[XRanger]

Schools can lend money through the direct loan program but lots (most) schools don't use this program, leaving us to find private lenders to give us money. I've never attended a school with a direct loan program. If you do have a direct loan program, you might be able to choose other lenders anyway.

So if my school has Federal direct loan program, the school is my lender for both the subsidized and unsubsidized loans right? I don't have to choose another lender.

 

[TMP-SMX]

Your school isn't the lender for Staffords the federal government is the lender. For Perkins, the school is the lender.

But yes, if you have the Direct Program the feds are your lender for staffords and grad plus.

 

[beebee0]

Citi has no more of the 6-month forgiveness?

BTW, if you choose a bank that may go bankrupt, then you won't have to pay back the loans if they do, right?

 

[TMP-SMX]

Citi has no more of the 6-month forgiveness?

BTW, if you choose a bank that may go bankrupt, then you won't have to pay back the loans if they do, right?

Where did you learn that? It's not a 6 month forgiveness it is part of your grade period that you get for all federal loans.

As for bankruptcy, nice try. The lender doesn't really play a role anyway in your payments the guarantor does.

 

[beebee0]

....................

The only one with any other incentives from my lender list was Citibank, which also has a 0.5% principal deduction when you start payment,

and the last 6 months are waived if all your payments are on time. ...give or take I think that will be about 6 thousand dollars difference when it is all said and done for the full stafford amount (counting interest and all that good stuff).
Since citi is the only one with additional incentives, it seems like the way to go... anybody find anything different?

seems like it. wait, did I get this wrong about Citi's 6-month forgiveness??

 

[TMP-SMX]

I see what you are talking about. The 6 month forgiveness is garbage. You are really worrying about the last 6 payments 15-30 years from now? My bets are that Citi will conveniently forget that they claimed they would do this and just not give it out when the time comes. Just get the up front fees waived with another lender.

 

[Sangria]

at what point can you still switch lenders?

 

[Guile]

I think any time before the loan is disbursed. Check with your financial aid office.