Are lenders being less than honest about their "benefits?"

[Gabujabu]

Regarding choosing a lender for school, I've narrowed it down to Medloans (Sallie Mae) and THE (Northstar). Medloans is clearly the better deal while in school/during grace periods (6.5% as opposed to 6.8% for THE). However, their deals during repayment seem to have strings attached. Essentially their 1% rate reduction for making on-time payments goes away if you miss a single payment (you can regain this benefit once after making 24 on-time payments), and their .75% reduction is for direct debit from your bank account. However, I've learned that only a small fraction (10-30%) of students actually get these benefits! Now it seems to me that it isn't too difficult to make consecutive payments on time if you link your account to a bank, and signing up for direct debit seems even easier, yet the majority of students never get either of these benefits. Since these benefits would save the average students many thousands of dollars, I am left wondering Is there some sort of catch, since why else wouldn't more people be taking advantage of them?

Finally, although THE offers benefits only once repayment begins, 95% of students get their 1.3% rate reduction, which seems quite straight-forward. Although this isn't quite the 1.75% discount that Sallie Mae offers, at least the vast majority of students seem to get it. Also, the company Sallie Mae makes me nervous.

I was wondering what students who have experience with these lenders think. Thank you!

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[UserNameNeeded]

I think your suspicions are very well founded. I took out my loans through THE, even though I don't trust THE, either, even if they say they're "non-profit." Sally Mae seems more sinister (probably because it's bigger, older and more well-known).

 

[mshheaddoc]

I will never ever go with Sallie Mae again. I had loans from my post-bacc. Biggest mistake. Go with THE. I usually don't like to "tell" people where to go, but in this instance, you are right. Many students NEVER get these bonuses for one reason or another. I'd go with THE.