Med School Lenders

[KimR]

Are all medical school lenders created equal? I have to choose a lender for my med school Stafford loan.

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[Mango]

I think they're all about the same. I chose MedLoans because they give you back your origination fee during repayment if you make your payments on time. However somebody told me that their lender didn't even charge the 3% origination fee. So that would give you larger checks. It may have been the T.H.E. one, but I'm not sure. Just read the brochures and pick one that sounds good. In truth, they are all about the same. Good Luck

 

[puffy1]

T.H.E. is the loan that give you 100% of your loan (as opposed to 96% as most lenders). Also, THE gives breaks on interest rates during repayment if you make 30 consecutive repayments (or something like that).

 

[pcl]

<font face="Verdana, Arial, Helvetica" size="2">Originally posted by puffy1:
T.H.E. is the loan that give you 100% of your loan (as opposed to 96% as most lenders). Also, THE gives breaks on interest rates during repayment if you make 30 consecutive repayments (or something like that). •

I was told that MedCap also has no origination. I have the MPN at home, I'll try & remember to verify that tonight.

 

[abbeydesert]

I was just looking at the T.H.E. Webpage at www.northstar.org It sounds great- almost too good to be true- 0% origination and 0% guarantee on subsidized Staffords? So how do they make money off of their service? Can anyone else report on experiences with this lender- any negatives at all or comparisons to other lenders? Thanks!

 

[Rdora]

I think T.H.E. makes their money by charging you a 3% on the amount that you own starting prepayment. At least that was what the fine print said on their website.

 

[Snoopy]

I use T.H.E. and think they offer a great deal. You can check out the specifics at:
http://www.northstar.org/download/2001_2002_med_terms.pdf

It's especially nice to get the full amount of the loan up front. Only the private and residency/relocation loans have origination fees.

 

[ckent]

AMSA has what looks like a good student loan program, you just have to be a member. Try going to their homepage at http://www.amsa.org

 

[abbeydesert]

Hmm...looks like T.H.E. may be the best deal for subsidized loans and AMSA the best for unsubsidized, based on what I've seen so far. T.H.E. apparently charges no fees whatsoever for subsidized loans- no guarantee fee, no origination fee, you get the full amount, period. But they do charge substantial fees on unsubsidized loans. AMSA, OTOH, offers 0% Interest for the First Year for new unsubsidized loan borrowers. I suspect it would be too much trouble to go with 2 different lenders, though, especially since I have yet a third lender from undergrad (Boy, I wish I had known back then that your lender DOES make a difference! The Dept of Ed documentation implies that ALL lenders charge the same amount in fees, so I just went with my local bank- big mistake! That cost me about $1000 in money that I never got, but will still have to pay back with interest!)

 

[pcl]

Originally posted by abbeydesert:
•Hmm...looks like T.H.E. may be the best deal for subsidized loans and AMSA the best for unsubsidized, based on what I've seen so far. T.H.E. apparently charges no fees whatsoever for subsidized loans- no guarantee fee, no origination fee, you get the full amount, period. But they do charge substantial fees on unsubsidized loans. AMSA, OTOH, offers 0% Interest for the First Year for new unsubsidized loan borrowers. •

Do you mean no fees for subsidized or no fees for stafford? I understood that THE has no fees for all stafford, sub & unsub, but that they charge fees for alternative loans that are not federally guaranteed. Thx for the clarification.
Laura

 

[abbeydesert]

Oops, you're right! I stand corrected. I just checked their website and T.H.E. apparently has no guarantee or origination fees on any Stafford loans, subsidized or unsubsidized. All the info is on their website in PDF at http://www.northstar.org/download/2001_2002_med_terms.pdf
Apparently, I got confused when one of the above posters stated that they charge a 3% origination fee at repayment. That is incorrect. The 3% fee at repayment applies only to alternative (private and residency/relocation) loans- NOT to Stafford loans (whether subsidized or not).
So I guess T.H.E. is the cheapest lender, after all.

Originally posted by pcl:
•Do you mean no fees for subsidized or no fees for stafford? I understood that THE has no fees for all stafford, sub & unsub, but that they charge fees for alternative loans that are not federally guaranteed. Thx for the clarification.
Laura•

 

[omores]

Hokay, let me try to figure this out.

MEDLOANS has no guarantee fee, but they do have a 3% origination fee. After you graduate, if you agree to get your "servicing correspondence" by e-mail, you get a 3.5% reduction of your principal balance. Pay electronically and get .5% off the interest rate. Make on-time payments for 4 years and get 2% off the interest rate for what remains.

T.H.E. has no guarantee OR origination fee. Sometime "within the first year or so" of repayment, you start getting a repayment bonus (i.e. deduction) each month, but the exact amount seems to depend on many variables. They claim it will save you 8-20% off the principal. Since it's an amount that's deducted from the principal each month, the longer you take to pay off your loan, the more you'll "save".

Interest rates are the same for MEDLOANS and T.H.E.

I'm still confused.

 

[abbeydesert]

Hmmm...it seems to me that the biggest difference is that T.H.E. gives you the 3% money on the front end whereas MEDLOANS charges it up front, but gives it back to you later. So T.H.E. never charges you the guarantee fee to begin with, meaning you get more money now. MEDLOANS, OTOH, takes out the 3% now, but gives it back at repayment. Both plans seem to give out additional bonuses later, but those amounts will vary depending on your principal, etc.
All other things being equal, I think I'd rather have the 3% NOW rather than after residency- i.e., by the time I can afford to make those loan payments, I'm sure the extra 3% won't seem as huge as it does now. So on an $8500 subsidized Stafford, 3% would be $255 x 4 years of loans = $1020 total. Just a drop in the bucket when you're looking at paying back 100K or more in loans, but I think I'd rather have the extra few hundred now and take in a few movies and maybe a nice dinner on the town.
Personally, I don't really care too much about the repayment bonuses, as I plan to pay as much off as much of my loans as soon as I can. I want to get out of debt ASAP and if that means I hold off on buying a house or new car, that's fine. Just a personal preference due to some negative family experiences with credit histories...

Originally posted by omores:
•Hokay, let me try to figure this out.

MEDLOANS has no guarantee fee, but they do have a 3% origination fee. After you graduate, if you agree to get your "servicing correspondence" by e-mail, you get a 3.5% reduction of your principal balance. Pay electronically and get .5% off the interest rate. Make on-time payments for 4 years and get 2% off the interest rate for what remains.

T.H.E. has no guarantee OR origination fee. Sometime "within the first year or so" of repayment, you start getting a repayment bonus (i.e. deduction) each month, but the exact amount seems to depend on many variables. They claim it will save you 8-20% off the principal. Since it's an amount that's deducted from the principal each month, the longer you take to pay off your loan, the more you'll "save".

Interest rates are the same for MEDLOANS and T.H.E.

I'm still confused.•

 

[Methuselah]

Because Medloans takes 3.0% upfront and gives you 3.5% back upon graduation, in return for the $255/year orign. fee you get a whopping $170 lopped off your principle loan amount. I think I'd rather have the $255/yr, too.

 

[Chimera]

How does MEDCAP compare with T.H.E.?

 

[ckent]

Has anyone here ever used the THE thing? I am always hesitant to just go by what the company is saying.

 

[Snoopy]

I use T.H.E. and have been very happy, especially with the extra several hundred dollars I get that my classmates don't. I am still a student so I don't know how everything works once repayment begins, but my understanding is that if you make all of your payments on time you begin to get lower interest rates and credits. The only drawback for me has been that I am apparently the only one at my school who uses T.H.E. (the school recommends a different program) so my checks usually come a little later (1-2 weeks). Fortunately this has not been a problem. T.H.E. has been very nice to me over the phone, so if you have questions I would give them a call.

 

[docuw]

My finanical aid advisor emailed me and said that Wells Fargo and Union Bank now are offering 0% origination on Stafford (which is really the only benefit of the THE that I could find). They also dont list THE/Norhtsate as being one of their preferred lenders, so I am not going to use them. I couldnt find that 0% stuff on the Wells Fargo webpage, but I told him to send me the application.

 

[kris]

Originally posted by docuw:
•My finanical aid advisor emailed me and said that Wells Fargo and Union Bank now are offering 0% origination on Stafford (which is really the only benefit of the THE that I could find). They also dont list THE/Norhtsate as being one of their preferred lenders, so I am not going to use them. I couldnt find that 0% stuff on the Wells Fargo webpage, but I told him to send me the application.•

What a bummer! I mentioned this MEDCAP (Wells Fargo) loan earlier (on a different loan thread?), and I have the 2001-2002 brochure in my hot little hands! You're right that the website isn't up to date. It still lists a 3% fee! I guess it'd be a good idea to call them to make sure: 1-800-658-3567. When I called them in March, they said it was true--0% federal guarantee fee on staffords, and a 0% origination fee on private loans.

--kris

 

[kris]

Originally posted by abbeydesert:
•I was just looking at the T.H.E. Webpage at www.northstar.org It sounds great- almost too good to be true- 0% origination and 0% guarantee on subsidized Staffords? So how do they make money off of their service? Can anyone else report on experiences with this lender- any negatives at all or comparisons to other lenders? Thanks!•

Abbeydesert,
When I talked to someone at the bank about how they determined whether they charge a guarantee fee, basically she explained that it all depended on whether the bank's guarrantors were charging the bank a fee! It sounds like the charge is passed along, but right now, the banks are in a position to pass along no fee.

I'm sure they're making plenty of money off the interest former students are paying.
--kris

 

[usfgator]

I went ahead and called Wells fargo and they do have a special offer with 0% origination and guarantee fees. However the catch is that you get absolutely NO REPAYMENT BENEFITS. So in my opinion this is not worth the 0% fee. I also called T.H.E. They told me their T.H.E bonus is a savings of 1.3% on interest each year. This is nothing when you compare it to medloans. If you take the .25% interest savings each month with medloans, you save 3% a year on interest. T.H.E does have the 0% origination and guarantee fees, but you save much less money in the end. This is just my opinion. If I did something wrong or you disagree, I welcome any comments.

 

[kris]

Originally posted by usfgator:
•I went ahead and called Wells fargo and they do have a special offer with 0% origination and guarantee fees. However the catch is that you get absolutely NO REPAYMENT BENEFITS... This is just my opinion. If I did something wrong or you disagree, I welcome any comments.•

No way! Seriously? I swear, I when I called Wells Fargo about Medcap, they said something like: if you do autopay they'd take off .5%; if you make 48 consecutive on-time payments, they'd drop the interest another 1 or 2%. I can't make this stuff up, so I'm wondering which one of us got the bad info! Do you suppose we need to make a distinction between stafford repayments and private loan repayments?

--kris

 

[usfgator]

Kris

The lady at Wells Fargo told me that the MedCap loan with 0% fees had no repayment benefits. However that is their special deal that they are running right now. If you prefer you can apply for their normal Medcap loan program and get those repayment benefits. However you will be charged the 3% fee. They might have told you that they have a 0% guarantee fee, which is true for their normal MedCap, but not a 0% orgination fee. I made sure to go over everything twice with her so unless she did not know what she was talking about, thats it. Also it was for staffords. I also made sure of that. On a side note, some people earlier were wondering how banks like northstar (T.H.E) get away with having no origination fees. They do this by deducting less interest and savings in the repayment years compared to those who do charge it. I know it seems like alot when you go to their website, but the longer you stay with their program, the more likely you will see their benefits. A bonus of 1.3% savings a year isn't much. I asked the lady if that was their only repayment benefit and she replied that was their only one. Believe me, I was disappointed. Thats my two cents.

 

[nychick]

I'm asking for a friend that is looking at them versus some other lenders...