Need advice choosing a lender for Stafford loans

[Dr. Cat]

I'll be starting medical school in July and need to choose a lender. I've done some research and am not sure if it is better to choose the lender with lower upfront fees or one with interest rate reductions and credits towards the principal. Here's a summary of the 9 lenders I can choose from at my school. All lenders have a 1% guarantee fee and 3% origination fee. Can someone give me advice about these lenders? Does anyone have a spreadsheet that I can use to compare which will be the better value in the long-term? Thanks!


Southwest Student Services Corp-Outstanding Value
0 % "Absolute Zero" Loan Origination Fees
1 ? % interest rate discount at repayment
? % interest rate discount for auto debit (Discount is lost at 60 days late)

Bank One - Outstanding Service
2 % Credit of original principal balance at repayment (Must automate account)
*1 % interest rate discount for auto debit
*Cash back or Credit of 4 ? % based on the original principal balance (Must make 33 initial consecutive on-time payment and automate account)
(Discount eligibility is lost at 14 days late)


Bank of America
*1 % Credit of principal loan balance at repayment
2 % interest rate discount with auto debit (Interest rate discount is lost at 2 NSF or in the event an auto debit is terminated for any reason)
(Discounts are for loans serviced at MOHELA)


Wells Fargo EFS
*? % interest rate discount for auto debit
Credit of 4-3/5 % based on loan balance after 36 initial consecutive on-time payment (Discount is lost at 14 days late)


MEDLOANS?/Bank One - Outstanding Service
*Cash back or Credit of 3 ? % based on original principal balance for eligible loan (Must graduate & automate account)
*Cash Back or Credit of 4 ? % based on original principal balance for eligible loans. (Must make 33 initial consecutive on-time payment and automate account. (Eligibility is lost at 14 days late.)


ASAP/Union Bank & Trust
*1 % Origination fee discount at disbursement
Credit of 3-1/3 % based on principal balance after 30 initial consecutive on-time payment (Must automate account)


DM Federal Credit Union (Membership required)
1 % interest rate discount at repayment
? % interest rate discount for auto debit (Discount is lost at 60 days late)


Chase
*2 % Credit of original principal balance at repayment
(Must automate account)
*1 % interest rate discount for auto debit
*Cash Back or Credit of 4 ? % based on original principal balance (Must make 33 initial consecutive on-time payment and automate account for all cash back or credits-see lender for more details)
(Discount eligibility is lost at 14 days late)


College Loan Corp
*Cash rebate or credit of 10% based on the principal balance at 48 initial consecutive on-time payment
*? % interest rate discount for auto debit

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[mpp]

I wouldn't go with any of those if they all charge origination/guarantee fees. I would go with one that has zero upfront fees...i.e., no origination fee and no guarantee fee. There is no need to pay these fees. The repayment terms of a lender are usually not as important since most students consolidate their loans with a new lender once they complete medical school and will never be eligible for those benefits. Also, the origination/guarantee fee are typically taken out as principal loan funds which accrue interest which means that you may be paying for your loan fees for many years to come. Find a lender with no upfront fees....T.H.E, AccessGroup, NowLoans are some that come to mind...there are others.

 

[Gleevec]

Total Higher Education is the best IMHO. And I put my money where my mouth is, literally.

 

[Dr. Cat]

Thanks for the advice, mpp, but I thought I had to use the lenders recommended by my school, and this is the list I received from them. I just looked at their website again and noticed these additional lenders below, and it looks like I can use T.H.E. or Education Solutions without an origination fee. I'm only going to have loans for medical school, and I assume they'll be from the same lender, so am I eligible for consolidation or would I just repay to the same lender? Sorry for so many questions, but I'm new to this financial aid stuff and haven't received much information from my school about the loan process. Thanks!

Student Loan Xpress
*1? % interest rate discount at repayment
(Must have$7500 balance at repayment)
*? % interest rate discount for auto debit


Citibank
*? % interest rate discount for auto debit
*2 % interest rate discount with 48 icop
(Discount is lost at 15 days late)


Chela Education Financing
1? % interest rate discount at repayment
(Must have $7500 balance at repayment)
*? % interest rate discount for auto debit


CollEDGE Loans
*? % interest rate reduction with auto debit
*MVP-5 Free payments over the life of loan with continuous on-time payments after 36 icop
*Credit of 3% loan amount at repayment with auto debit (Restrictions apply, see lender for delails)
Discounts lost at 30 days late or withdrawal from auto debit


Two Lenders for College of Medicine only ..
T.H.E. Loan Program
(Only for students admitted to College of Medicine)
*0 % Absolute Zero Loan origination fees
*T.H.E. Bonus - A monthly credit to principal balance at repayment (Must see lender for details)
(Discount is lost at loan default)
Education Solutions
(Only for students admitted to College of Medicine)
*0 % Absolute Zero Loan origination fee
*? % interest rate discount for auto debit
*Credit of 3-1/3 % of principal loan balance after 30 icop (Discount is lost at 3 days late of any icop)
(For health profession students only, other restructions apply - see lender for details)

 

[mpp]

Just for future information, the list you get from your school is just a list. You can choose anyone you wish regardless of if they are on the list.

 

[OSUdoc08]

Choose a lender with no fees:

MEDCAP loans for Health Professionals
WellsFargo
lender ID 831058
800-658-3567

Medical Access Loan
Access Group
lender ID 808851
800-282-1550

Health Education Services
Bank of Oklahoma
lender ID 833820
800-788-1881

NOWLOANS
A.T.Still University of Health Sciences
lender ID 831083
800-389-9622 Stillwater National Bank
lender ID 809081
800-678-4723

I recommend the one I am using the most:

Total Higher Education (T.H.E.)
Loan Program
North Star
lender ID 876529
888-843-0002

 

[Dr. Cat]

Just for future information, the list you get from your school is just a list. You can choose anyone you wish regardless of if they are on the list.

Thanks for the info. Like I said before, I'm pretty clueless when it comes to financial aid stuff. I'll look into some of those no fee lenders.

 

[nascentdoc]

I went with T.H.E. Probably the best deal out there. No origination fees and great service.

 

[osteo emt]

i concur dr............t.h.e. appears to be one of the best, if not the best........great, friendly staff who will readily answer all ur q's........and they wont sell ur loans to anyone........osteo emt

 

[oompa loompa]

Hey guys, thought I'd bump this thread since I'm running into some trouble choosing a lender myself and getting very confused by some of the jargon.


So my school recommends that I go with Bank of America for the following reasons:

1.) 0% origination and federal default fee on federal Stafford loans

2.) Interest rate reduction in repayment for Stafford loans: 2.5 percentage point interest rate reduction initiated at repayment if payments are deducted automatically from your bank account.

OK...so this sounds really good and I sign, but when I start reading the terms I actually signed to, it says this:

I request and authorize my lender to: (1) during the in-school and grace periods of any loans made under this master promissory note, defer and align the repayment of principal on all of my FFELP loans that are in repayment status; and (ii) add unpaid interest that accrues on all my FFELP loans to the principal balance of such loans("capitalization") including such loans made under this Master Promissory Note, during forbearance periods, and for unsubsidized loans, during in-school, grace, and deferment periods as provided under the Act. "Capitalization" will increase the principal balance on my loans and the total amount of interest charges I must pay.

OK, so NOWHERE on their website do I find any specific info on when they start capitalizing....i.e. when they start adding my unpaid interest to the principal so that my total loan amount increases and even more interest accrues. But, just from reading what I signed, it looks like they COULD start capitalizing while I'm still in school...am I correct, or just paranoid?