Lets talk about loans...

[alwaysaangel]

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We are all going to be dealing with loans soon, so lets see what kind of info bank we can get together from all our brains.

So ask or answer and lets see if we can make a pretty informative thread about loans.

As far as loans go (federal and private), does anyone know if schools care what lender we use to get our loans? I think I'm just gonna go with my bank (B of A) since I already have accounts with them and their Stafford loan bonuses are decent. But I'm not sure if my school is going to have a specific lender they want me to go to, is it common for a school to insist you work with someone specific?

Also, does anyone know what we need from our school before we can go to a lender and apply?

And for anyone who has taken out loans before - what questions would you recommend we ask the lender before we actually choose them for the loan. In my research I've come up with these:

- When does the interest capitalize? (although someone on here said it doesn't until repayment - I want to know for sure).

- Are you 0% fees actually waived or are they simply reimbursed upon payment?

- When do the discounts listed take affect, and how late can a payment be before I lose my ability to get those discounts?

-Is there anything other than the standard bonuses that you can offer me based on my history with your bank and my credit history?

Thats all I've gotten but I'm sure there are more things I need to ask about the loan, any ideas anyone?

 

[Daydreamer2008]

Hey alwaysaangel,
I am pretty familiar with the loan process, so let's see if I can answer some of your questions.

-I'm pretty sure you have to fill out the FAFSA and go through your school before you can get any type of student loans. Maybe not, but I think you have more of a chance to get subsidized loans this way (they do not accrue interest until you graduate). Usually, the school gives you a financial aid letter with what type of loans you can accept. At least at UCLA for graduate school, you have a LONG list of lenders you can choose from, and maybe it's like this at other schools, depending?
-For subsidized loans-interest starts accruing at graduation. For unsubsidized loans-interest accrues the moment you take the loan out. I'm not exactly sure when the interest capitalizes (as in is added to your principal balance), but I think that it capitalizes when you start paying the loan off.
-I don't know what you mean by 0% fees
-Many lenders have different types of bonuses discounts, some have none. For undergrad I had some, but not for graduate school. I guess it depends?

I hope this helped somewhat. 🙂

 

[alwaysaangel]

Thanks for the info!

As far as the 0% fees thing, the last 4 questions with the bullets were just things that I've figured out I need to ask the lender themselves before I sign any papers and accept a loan. That last paragrpah wasn't so much asking people on here those questions, as I was asking people what they think you should ask the lender before signing papers: I just think it would be useful to start building up a list, since a lot of us have never gotten loans before.

 

[dpmd]

-For subsidized loans-interest starts accruing at graduation. For unsubsidized loans-interest accrues the moment you take the loan out. I'm not exactly sure when the interest capitalizes (as in is added to your principal balance), but I think that it capitalizes when you start paying the loan off.
-I don't know what you mean by 0% fees

Not exactly. Subsidized loans begin accruing interest at the end of your grace period (6 months following dropping below at least half time-or graduation if you stay in school the whole time).

Interest accrues on you unsubsidized loans when they disburse (not at the beginning of the year when you sign the promissory note). There is a period of time after it is disbursed that you can cancel it (they take back the money without charging you fees or interest like it was never lent). The length of time depends on the situation. I signed my financial aid package before they applied my scholarship. When I tried to change things around they at first disbursed the loans in fall, then planned to apply my scholarship for spring. I got them to switch this around at the start of spring semester (after a lot of effort). This saved me about 5 or so months of interest. So you should take out as little as possible at first, since you can always ask for more funds later in the year and not accrue as much interest.

Accrued interest is capitalized at the end of your grace period (which occurs before your first payment is due, so if you plan on paying some of this interest you need to calculate when your six months is up and pay before that date).

If you are talking about lenders offering no origination fees, etc. Generally they pay those fees for you, so at first it gets taken out then the lender reimburses you right away.

One other thing you should do is find out how delaying payments during residency will affect your eligibility for whatever incentives they offer.

 

[alwaysaangel]

One other thing you should do is find out how delaying payments during residency will affect your eligibility for whatever incentives they offer.

Excellent - thanks this is the kind of thing I'm looking for.

As far as the 0% - a website I was looking at said that sometimes when it says that the originator fees are 0% they actually take them out at the beginning and simply reimburse you upon repayment - which isn't as valuable as them paying them for you at the start. So I want to make sure I ask about it. It apparently depends on the lender.