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bancorpsouth anyone?

Discussion in 'Financial Aid' started by Zetterberg07, May 7, 2007.

  1. Zetterberg07

    2+ Year Member

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    Anyone thought about borrowing staffords through bancorpsouth? They seem to offer the best deal I've seen (they cover origination and default fees, you get a 2% interest rate deduction when you enter repayment). I'm from the north, and I've never heard of this bank. It seems like nobody talks about them, so I'm kind of hesitant to borrow from them.
    Any thoughts?
     
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  3. martin73

    martin73 Membership Revoked
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  4. Astrithir

    Astrithir Member
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    It does seem to be a good deal once you enter repayment. However, I think there are three things that make me wary of them. First, in going through their terms, I notice that they say they WILL sell your loans to someone else. Though the terms and rates may not change if they sell, I wonder if I would like to deal with the new owner of my loans. Second, the interest rate deduction begins at repayment. This generally means that your interest rate during deferment, i.e. while you're in school (and possibly residency), is the non-discount rate, currently 6.8% with Staffords. Third, they did not disclose all of their terms, which always makes me skeptical. Two big factors: how do they capitalize interest? If they do it quarterly, then you're paying interest on top of interest! But if they do it only once, after deferment, then you might be looking at a good deal. and, what strings are attached to that 2% discount?
     
  5. Zetterberg07

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    Thanks for the reply Astrithir.

    As far as selling the loans, I was under the impression that the majority of stafford lenders sold the loans at some point, usually around when you entered repayment? I could be totally wrong about this.

    With regard to the interest rate, when I called the representative I spoke to on the phone stated that you had to miss two payments in order to lose the 2% interest rate deduction. She was very vague when answering my questions though, so that does leave me kind of suspicious. I would imagine that at the least when you signed you MPN they would have to let you read the contract, but it is weird that they aren't more forthcoming with the terms of their student loans.
     
  6. okbye

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    I don't know anything about the company either, their website says they only have banks in Mississippi, Alabama and Tennessee, but if you have a funny feeling about them you should be careful. It could be the person you talked to just wasn't very knowledgable instead of intentionally vague but you need to find out for sure. They should be able to give you the exact terms, ask they be sent in writing. If they refuse - run! I wouldn't normally be worried about it being in writing but if they are being that vague I wouldn't trust them. Ask if the terms are guaranteed if the loan is sold, some do, some don't. Most regular lenders do not sell their loans even though they will not guarantee you they won't, this looks like a smaller company which is probably why they're saying they will sell it.
     

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