Choosing a Stafford Loan Lender

TMP-SMX · May 30, 2009

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.

Guile · May 30, 2009

TMP-SMX said:
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 · May 31, 2009

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 · May 31, 2009

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 · Jun 1, 2009

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 · Jun 1, 2009

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 · Jun 2, 2009

phungy said:
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 · Jun 10, 2009

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 · Jun 10, 2009

koercive said:
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 · Jun 10, 2009

TMP-SMX said:
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 · Jun 10, 2009

cougarY said:
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 · Jun 12, 2009

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 🙂

koercive said:
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 · Jun 17, 2009

Doctor Bagel said:
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 · Jun 17, 2009

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 · Jun 18, 2009

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 · Jun 18, 2009

beebee0 said:
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 · Jun 18, 2009

asies said:
....................

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 · Jun 18, 2009

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 · Jul 1, 2009

at what point can you still switch lenders?

Guile · Jul 2, 2009

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

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