Choosing a lender?

[WiscDoc]

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So as I am getting ready for med school, I need to choose a lender (our school gives us 80 options to borrow from). Anyone else face a similar situation, and if so, how did you choose a bank? We all go through the same company/guarantor, but we choose our lender. I contacted my school's office of financial aid, as well as the guarantor, and they both said it is something I need to look into and gave no tips at all!! Thanks for any insight. 😎

 

[Critical Mass]

I would suggest the financial aid forum, but I doubt that anybody ever reads it.

I never really found a significant difference between the lenders. I use the medloans program, but I don't know anybody else who does the same.

What you will find is that some offer incentives that others don't (no origination fee, drop in rate if the first few payments are on time, yada yada), but the numbers wind up similar if you pull your calculator out (especially given the size of the principal).

 

[Bertelman]

I'd suggest picking 4-5 names off the list, at least a couple big ones that are familiar names. Get their info, figure out which offer incentives, then pick one.

In the end, it will probably be serviced by ACS anyways. 🙄

 

[RockShox]

It won't matter they all bend you over. The only choice you get is whether you want it to be ribbed or tickly.

 

[alwaysaangel]

These two sites were helpful for me when deciding:

http://www.finaid.org/loans/studentloandiscounts.phtml
http://www.finaid.org/loans/staffordloandiscounts.phtml

One discusses what discounts mean and what you should look for and the other is the comparison charts for various lenders.

I ultimately decided on B of A. They are my bank and it makes the whole automatic transfer thing easy, plus I liked their discounts and felt they were the most useful for me since I want to pay it back fast so principle reductions are most helpful. But THE has some really good discounts too and seems to be commonly used.

 

[LJDHC05]

THE is pretty good as far as loans go. They discount your interest rate as soon as you're in repayment and making minimum payments on time. If you've got to be done in the butt, it might as be by someone who is gentle.

This is the place we use: http://www.northstar.org/

 

[Gene Therapist]

THE is pretty good as far as loans go. They discount your interest rate as soon as you're in repayment and making minimum payments on time. If you've got to be done in the butt, it might as be by someone who is gentle.

This is the place we use: http://www.northstar.org/

Yup defintely the best way to go. Everyone I know is using them.

 

[RockShox]

THE is pretty good as far as loans go. They discount your interest rate as soon as you're in repayment and making minimum payments on time. If you've got to be done in the butt, it might as be by someone who is gentle.

This is the place we use: http://www.northstar.org/

This is who I am with and they same fine. Of course from talking with other friends you really don't find out how good your lender is until you enter repayment. That is when their true colors are revealed. I know that I have had some people who have had nothing but rudeness from citibank when they went into repayment not sure it there are others like this.

PS - Interesting about how some of the financial aid workers at schools are in bed with the companies.

 

[menaniac]

PS - Interesting about how some of the financial aid workers at schools are in bed with the companies.

Interesting, bah! Disturbing! Yea Andrew Cuomo! I hope he sues the pants off the lot of them and gets some protection for us clueless students. Nothing makes me madder than someone lining their pockets off of my dime!

 

[njbmd]

Moving to financial aid forum.

 

[student101]

They discount your interest rate as soon as you're in repayment

I'm not sure why this would really matter for most students. Don't most students consolidate their loans once in repayment anyway? Or am I wrong?

 

[edubbs5]

I'm not sure why this would really matter for most students. Don't most students consolidate their loans once in repayment anyway? Or am I wrong?

Consolidation used to make sense - when interest rates were low - now that interest rates are fixed, consolidation isn't always the best way to manage your student loan payments.

Also - you should be sure you are choosing a good lender from the get-go consolidation or not. Yesterday I was talking with someone that found out that their lender was capitilizing interest EVERY QUARTER - that doesn't happen with every lender.

 

[okbye]

Key points to find out about -
1. Origination fee - Charging the student an origination fee on Stafford loans becomes illegal I believe next year so many companies are dropping it now.
2. Capitalization time frame - Quarterly is bad, annually is good.
3. Customer Service - How hard is it to get an actual person on the phone? If there ever is a problem you want to be able to reach someone.
4. Repayment Incentives - Moot point if you plan to consolidate.

There are still a lot of good reasons to consolidate after graduation even if your interest rate is fixed, you have to take your situation into consideration and do what's best for you.

 

[okbye]

I just came across this website today from a Google alert - http://www.simpletuition.com/student_loans
They compare different lenders for your situation. I just typed in some random figures for a local uni and it gave me 13 different lender's terms.
I read up on the company and they are paid a referal fee whenever someone clicks through to apply to a lender from their site, but the partner lenders are clearly marked and of the 13 results it gave me only 4 were partners. Of course the partners are listed first. It lists monthly payment amount, total cost of loan and interest rate. They do list origination fees if you click on the expanded results. It says they have about 100 lenders in their system, all the main big lenders were on my results. I didn't see many smaller lenders, that could limit your results a bit. I tried one specifying I was in medical school and it didn't give either THE or Medloans but it might be useful if you're considering other sources.


* I have no affiliation with this site, it just looks like a handy utility.