Stafford Lenders

[Childe]

Hey guys,
I'm researching a lender for my stafford loans. Trying to figure out which offers the best savings out of the lenders on my schools list.

For instance:
ASLA (asla.state.ar.us)
Fees: 2%+1%
Rate Deductions: 1% for autodebit, 2.5% for 48 payments

AAMC (www.aamc.org/medloans)
Fees: 3%+.5%
Rate Deductions:
Cash Back/principal reduction: 3.5% (graduate) + 4.5% (33 payments)

Acapita (www.acapita.org)
Fees: 0%
Rate Deductions: .25% autodebit, 2% 36 payments


I'm just confused as to what is better, fee reduction, rate reduction, or principal reduction?

Also any other good lenders with better programs?

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[mpp]

Definitely zero fees. The fees a company charges will be covered by increasing your borrowing amount or decreasing the amount you receive in loan money. Then, as you are in school, those fees will acrrue interest.

When you enter repayment you will likely consolidate your loans and never see the promised reduction during repayment since you will be with a different lender for consolidation.

Always take the lowest up-front cost. Also, it is important to have more than one lender during your Stafford loan career (use one lender your first year or two and a different lender the next couiple of years) which will open up more options for consolidation later.

 

[Childe]

Ah thats very helpfull, thanks!

 

[OSUdoc08]

T.H.E.

Total Higher Education

 

[Childe]

T.H.E.

Total Higher Education

Ooh that one does look nice, you used them before?

 

[gentlekev]

Definitely zero fees. The fees a company charges will be covered by increasing your borrowing amount or decreasing the amount you receive in loan money. Then, as you are in school, those fees will acrrue interest.

When you enter repayment you will likely consolidate your loans and never see the promised reduction during repayment since you will be with a different lender for consolidation.

Always take the lowest up-front cost. Also, it is important to have more than one lender during your Stafford loan career (use one lender your first year or two and a different lender the next couiple of years) which will open up more options for consolidation later.

I agree most of these. However, if you pay-off at the point where you receive all the rebates, it will probably be the most money saving path.
For example, Med Preferred provides 4% principle reduction post graduate plus another 10% after 48months (4yrs). If you pay off 4 yrs after graduation, it will save you 3~3.5% per yr, which is equivalent to your interest rate. I don't think any plan can beat that. Even if you pay off at the 6th yr post graduation, your accrued interest will still be less than other plans.
However, I am not completely certain that I'm right, feel free to amend what I said.

Kevin

 

[OSUdoc08]

Ooh that one does look nice, you used them before?

That's who I am using now.

No fees.

 

[Childe]

I agree most of these. However, if you pay-off at the point where you receive all the rebates, it will probably be the most money saving path.
For example, Med Preferred provides 4% principle reduction post graduate plus another 10% after 48months (4yrs). If you pay off 4 yrs after graduation, it will save you 3~3.5% per yr, which is equivalent to your interest rate. I don't think any plan can beat that. Even if you pay off at the 6th yr post graduation, your accrued interest will still be less than other plans.
However, I am not completely certain that I'm right, feel free to amend what I said.

Kevin

Although I'm not sure what youre saying exactly, I think I'm going to do some calculations to make sure a principal reduction isnt cheaper.

BTW, Just talked to my FAO, she says AAMC MedLoans is coming out with a new 0% fees loan as an alternative to their principal reduction loan.

 

[irishlaydi]

T.H.E.

Total Higher Education

Hi, thanks for the info. I have a brief list of Stafford Lenders given to me by NYCOM, but T.H.E. is not on it. I checked out the website and it sounds really good. Is this one you would recommend for a 1st year med student? Thanks

 

[trouta]

Ive used T.H.E. for the first three years of medical school. I have found them to be really good (no fees etc.) and their customer service is good as well. The only reason I am switching is to open up consolidation options.

 

[critterbug]

Definitely zero fees. The fees a company charges will be covered by increasing your borrowing amount or decreasing the amount you receive in loan money. Then, as you are in school, those fees will acrrue interest.

When you enter repayment you will likely consolidate your loans and never see the promised reduction during repayment since you will be with a different lender for consolidation.

Always take the lowest up-front cost. Also, it is important to have more than one lender during your Stafford loan career (use one lender your first year or two and a different lender the next couiple of years) which will open up more options for consolidation later.

Hey mpp

Does this advice still hold true to those of us consolidating while IN SCHOOL? I have only taken out 1 loan for 1 year. I have 3 more years to go.....so should I choose a different lender, or stick to the one Im consolidating with??

The reason I ask is because access group told me that I will still get the same incentives (interest rate reduction, etc) for my consolidated loan.

 

[flash]

Just beginning this process. Checked THE out, repayment off the website says 10 yrs. If I really want a 30 yr, I just need to make sure I get one upon consolidation right? i.e., I shouldn't be too concerned about that now, correct?

Also, I'm in at a second choice school now, hoping to hear good news from my first choice about my waitlist status in next few week (i hope) - should I be doing anything vis-a-vis lenders at this point (other than research, getting ready )?

Thanks a bunch.

 

[mpp]

If you have just one lender than you must use that lender for consolidation or use the federal government. If you have more than one lender you have the option of using any lender for consolidation.

You can change your repayment schedule when you consolidate.