Which option is better?

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randomlogik

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Just got this letter from school the other day. Not sure which option I should go with.

1. Pay 0% origination fee

2. Stay with current option of 3% origination fees and reap even greater rewards after graduation and in repayment. They don't specify exactly what the rewards are.

I guess I'll probably go with option 2 since I have not been short of cash right now, but I've always heard that going with no origination fee is the best option. Any thoughts?

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You can pay a 0% origination fee and then consolidate with whoever gives you the best rates.
 
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exactly what is origination fee, and how does the bank calculate that? Sorry, noob question.
 
An origination fee is money you pay up front to get the loan....it is mean for the lender to recoup to cost of processing the loan.

Never, never, never pay an origination fee as there is never a benefit to paying one (except the benefit to the lender that gets the fee). It's just that the government allows lenders to charge a fee if they want (up to a maximum of 3%) but many lenders do not charge any fee to borrow from them.
 
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