MEDLOANS Staffords

[GeauxMD]

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Has anyone looked at the MEDLOANS program this year? http://www.aamc.org/programs/medloans/termsconditions07.pdf

The terms seem to be unbeatable, but I might be missing something. Is there anyone else out there who gives an interest rate cut at disbursement?

 

[emtji]

Has anyone looked at the MEDLOANS program this year? http://www.aamc.org/programs/medloans/termsconditions07.pdf

The terms seem to be unbeatable, but I might be missing something. Is there anyone else out there who gives an interest rate cut at disbursement?

there's really no getting around "running the numbers". at face value, it's hard to compare borrower benefits unless you calculate what the overall payment will be over the life of the loan. i.e. unless you're a math whiz, get a good calculator and figure out whether it's better to get .3% IRR at the first payment or 1% after 24 payments, etc.

 

[Twitch]

Has anyone looked at the MEDLOANS program this year? http://www.aamc.org/programs/medloans/termsconditions07.pdf

The terms seem to be unbeatable, but I might be missing something. Is there anyone else out there who gives an interest rate cut at disbursement?

I like their terms much better than T.H.E. that some folks rave about here. The catch with them is the rate reduction doesn't occur until you enter repayment - and this may not happen after residency. So you're paying the full 6.8% with them. With the OP's link you get an immediate reduction. With time value of money, clearly this would be a better deal. However, the wording on footnote #1 concerns me:

"The 1 percentage point interest rate reduction ... - this benefit is retained during active periods of repayment for as long as the borrower pays as initially scheduled."

I don't like that word active. Does that mean if we go into forebearance during residency they take that away?

 

[GeauxMD]

there's really no getting around "running the numbers". at face value, it's hard to compare borrower benefits unless you calculate what the overall payment will be over the life of the loan. i.e. unless you're a math whiz, get a good calculator and figure out whether it's better to get .3% IRR at the first payment or 1% after 24 payments, etc.

The issue is not numbers. Numbers-wise, this plan seems to beat out all the others.

0.30 percentage point interest rate reduction at first disbursement
1.00 percentage point interest rate reduction after the first on-time payment
0.75 percentage point interest rate reduction for automatic debit

I'm more worried about them changing the terms or something once you sign up with them. This line scares me: Sallie Mae reserves the right to modify, continue or discontinue loan and borrower benefi t programs at any time without notice. All lenders seem to say that they can modify things at a whim. I would hate to sign up with them and then later see things change because they decided that they were not making enough profits already.

 

[BEMD]

I like their terms much better than T.H.E. that some folks rave about here. The catch with them is the rate reduction doesn't occur until you enter repayment - and this may not happen after residency. So you're paying the full 6.8% with them. With the OP's link you get an immediate reduction. With time value of money, clearly this would be a better deal. However, the wording on footnote #1 concerns me:

"The 1 percentage point interest rate reduction ... - this benefit is retained during active periods of repayment for as long as the borrower pays as initially scheduled."

I don't like that word active. Does that mean if we go into forebearance during residency they take that away?

If you read lower, there is a foot note about the 1% rate reduction that states if you miss an ontime payment you then have to make 24 consecutive ontime payments to earn that benefit back. Just thought I would point this out.

Also, I didnt understand why you ment with your comment that the rate reduction only occurs for T.H.E when you enter repayment? The same thing applies to this loan for the most part. You dont earn the 1% percent reduction or the other reduction for having it automatically credited from your bank account. To me it seems almost exactly like the T.H.E Loan program except with that program if you miss a payment you earn the 1.3% rate reduction back after 2 ontime payment rather then 24. Which ever loan you choose just make sure to read the fine print 🙂 .

 

[Twitch]

If you read lower, there is a foot note about the 1% rate reduction that states if you miss an ontime payment you then have to make 24 consecutive ontime payments to earn that benefit back. Just thought I would point this out.

Also, I didnt understand why you ment with your comment that the rate reduction only occurs for T.H.E when you enter repayment? The same thing applies to this loan for the most part. You dont earn the 1% percent reduction or the other reduction for having it automatically credited from your bank account. To me it seems almost exactly like the T.H.E Loan program except with that program if you miss a payment you earn the 1.3% rate reduction back after 2 ontime payment rather then 24. Which ever loan you choose just make sure to read the fine print 🙂 .

The 24 month reinstatement does suck. Their fine print isn't very clear. By initially scheduled I guess that means if we do residency and go into forebearance do we lose out on the 1% IRR? The key really seems to be when the IRR kicks in (immediately/upon graduation/post residency) and how they define you've entered repayment - are you in repayment when you're in forebearance? I know for a fact you're not in repayment when you've got an in-school deferment.

If no one else wants to - I'll call around and confirm. I'm planning to call T.H.E and OP's linked lender.

 

[p9142]

The 24 month reinstatement does suck. Their fine print isn't very clear. By initially scheduled I guess that means if we do residency and go into forebearance do we lose out on the 1% IRR? The key really seems to be when the IRR kicks in (immediately/upon graduation/post residency) and how they define you've entered repayment - are you in repayment when you're in forebearance? I know for a fact you're not in repayment when you've got an in-school deferment.

If no one else wants to - I'll call around and confirm. I'm planning to call T.H.E and OP's linked lender.

Hey Twitch, did you call medloans? I can't seem to get someone on the phone who has a clue what they are talking about. The T.H.E. people are very knowledgeable and helpful, but I would really like to get the medloans benefits unless there is some major catch that I don't see reading through the terms and conditions.

 

[meehawl]

there's really no getting around "running the numbers". at face value, it's hard to compare borrower benefits unless you calculate what the overall payment will be over the life of the loan. i.e. unless you're a math whiz, get a good calculator and figure out whether it's better to get .3% IRR at the first payment or 1% after 24 payments, etc.

In most cases, you are much better off getting a discount from the principal at the start. When you factor that money in over 10-15 years as a compounded saving (money saved through lessened inerest on lower principal + value appreciated through saved principal investment in, say, T Notes).

http://en.wikipedia.org/wiki/Time_value_of_money
WikiP goes into gory details. Excel will plug these numbers for you, but it can seem like a black box.

Also, for continual repayment discounts, there's a reasonable risk that you will default on them (lost check, non sufficient funds, etc) and so lose your discount for a period.

 

[zook]

Can't you just take the 0.3% reduction now, and then, when you graduate, shop around to find the best consolidation deal?

 

[p9142]

In most cases, you are much better off getting a discount from the principal at the start. When you factor that money in over 10-15 years as a compounded saving (money saved through lessened inerest on lower principal + value appreciated through saved principal investment in, say, T Notes).

http://en.wikipedia.org/wiki/Time_value_of_money
WikiP goes into gory details. Excel will plug these numbers for you, but it can seem like a black box.

Also, for continual repayment discounts, there's a reasonable risk that you will default on them (lost check, non sufficient funds, etc) and so lose your discount for a period.

I am not at all worried about the continual repayment discounts. I have never missed a payment on anything in my life because I am super anal when it comes to finances, but I am worried about this loan because all these companies seem so incredibly shady.

Also, the time value of money thing is huge. The .3% IRR is actually a big deal because this applies the entire life of the loan.

 

[Twitch]

Hey Twitch, did you call medloans? I can't seem to get someone on the phone who has a clue what they are talking about. The T.H.E. people are very knowledgeable and helpful, but I would really like to get the medloans benefits unless there is some major catch that I don't see reading through the terms and conditions.

I got the run around @ medloans too agree with your assessment about THE. It suprises me why AAMC would back such a lousy lender. Plus on a seperate thread there is talk about sallie-may being bought out.

I like the immediate 0.3% IRR they offer at disbursement on unsubs considering we won't go into repayment well after 10 years. EFSI (shady company from what I hear) offers 1.75% IRR for ACH and they let you setup ACH while you're inschool but those don't qualify for the 1.75% IRR. There appears to be a lot of strings attached that I don't like with these deals. I spoke to Ed Financial and they offered what seems to be a great deal and turned out those aren't IRR but principal reductions (not quite as valuable).

EDIT: Here is the DIRECT contact info:
Sharon Benson
MEDLOANS Specialist
[email protected]
317.841.4745

Jacquie Sullivan
MEDLOANS Specialist
[email protected]
317.595.1427

Some clarification from Sharon's boss:
0.3% IRR on disbursement
1% IRR on repayment (ANY period of deferment doesn't count). So if you go back and forth (repayment->defer->repayment), defer doesn't get this IRR.
0.75% ACH (same terms as 1% above)
Her boss will consider changing the wording on the terms & condition to clarify as stated above.

 

[Tusk]

Some clarification from Sharon's boss:
0.3% IRR on disbursement
1% IRR on repayment (ANY period of deferment doesn't count). So if you go back and forth (repayment->defer->repayment), defer doesn't get this IRR.
0.75% ACH (same terms as 1% above)
Her boss will consider changing the wording on the terms & condition to clarify as stated above.

Is the 0.3% reduction permanent for the loan or does it go away once repayment begins? Thanks.

 

[Twitch]

Is the 0.3% reduction permanent for the loan or does it go away once repayment begins? Thanks.

Doesn't go away FWIK. Though I'd shoot her an email just to double check.

EDIT: Got off the phone with them and they said they do take away the 0.3% when you enter repayment. So you only get 1.75% during repayment.

 

[p9142]

I got the run around @ medloans too agree with your assessment about THE. It suprises me why AAMC would back such a lousy lender. Plus on a seperate thread there is talk about sallie-may being bought out.

I like the immediate 0.3% IRR they offer at disbursement on unsubs considering we won't go into repayment well after 10 years. EFSI (shady company from what I hear) offers 1.75% IRR for ACH and they let you setup ACH while you're inschool but those don't qualify for the 1.75% IRR. There appears to be a lot of strings attached that I don't like with these deals. I spoke to Ed Financial and they offered what seems to be a great deal and turned out those aren't IRR but principal reductions (not quite as valuable).

EDIT: Here is the DIRECT contact info:
Sharon Benson
MEDLOANS Specialist
[email protected]
317.841.4745

Jacquie Sullivan
MEDLOANS Specialist
[email protected]
317.595.1427

Some clarification from Sharon's boss:
0.3% IRR on disbursement
1% IRR on repayment (ANY period of deferment doesn't count). So if you go back and forth (repayment->defer->repayment), defer doesn't get this IRR.
0.75% ACH (same terms as 1% above)
Her boss will consider changing the wording on the terms & condition to clarify as stated above.

I decided to go with MEDLOANS. Maybe I will be kicking myself later, but the IRR at disbursement is just too big of a deal to pass up. I hate the fact that the other lenders give medical students the same interest rates as other students even though the risk of us defaulting is much lower (even if we do default they still get paid anyway.) Medical student loans are very lucrative to lenders because we borrow tons of money.There is less overheard in servicing $200k of loans from one student as opposed to $200k of loans from 10 students. I like the fact that MEDLOANS gives us a little better deal while we are in school.

 

[Twitch]

I decided to go with MEDLOANS. Maybe I will be kicking myself later, but the IRR at disbursement is just too big of a deal to pass up. I hate the fact that the other lenders give medical students the same interest rates as other students even though the risk of us defaulting is much lower (even if we do default they still get paid anyway.) Medical student loans are very lucrative to lenders because we borrow tons of money.There is less overheard in servicing $200k of loans from one student as opposed to $200k of loans from 10 students. I like the fact that MEDLOANS gives us a little better deal while we are in school.

If I take out any unsub, I'll probably go with MEDLOANS. My alternatives are to tap into the nest egg, or since I'm a TX resident HELP or CAL loans @5.25% though with a 3% fee. The bad part is that they won't be considered for economic hardship deferment when we go into residency and want to defer our loans. Another angle is use the nest egg instead of unsub and enter repayment immedately on graduation and tap that additional 1.75% IRR for an effective 4.75% interest rate and make interest only payments. Decisions decisions...