switch lenders/ direct vs. stafford

[Astrid]

what do you guys think about the direct loans (straight from the gvt.) vs. the stafford loan (through a lender)? Also, if I choose the stafford option, is it best to keep all loans with the same lender (i have undergrad loans) or switch to one that has nice repayment incentives, etc?
any opinions helpful. thanks!!

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[k's mom]

All I can offer is that I have been VERY happy with my DIRECT loans. I also feel more secure with a federal debt because it is not based on credit history, and (as is true with most government programs,) they don't change very swiftly. As long as I keep my eyes open, any changes to the program, including interest rates and deferment issues are readily available ahead of time. Private banks are rarely so forthcoming.
However, if you are going to be consolidating, keep these things in mind:
#1-check the current interest rate. If you took out your original loans more than 4 years ago, you are almost certain to get a better rate.
#2-will you be consolidating loans with a significant other? If so, be careful. Most govt. loans stipulate that upon death or permanent disability, the loan(or some portion) is forgiven. If you consolidate with a spouse, that option is forfeited
#3-check to make sure your deferment options will still stand.

 

[KyGrlDr2B]

I'm wondering about about this too. I'm trying to figure out pro's vs. con's, but I'm new to this whole thing so it's getting pretty confusing. I wish more people would post in this forum...it seems like nothing gets answered fully .

 

[lilycat]

I don't know anything about going directly with the govt. so I can't help you there.

I borrowed through T.H.E. for my med school loans, and so far I've been very happy.

I have two different lenders for my undergrad loans, but I'm planning on consolidating those. I wouldn't worry too much on trying to consolidate your undergrad loans with your med school loans, but instead concentrate on finding the loan program with the best terms for the med school loans right now.

 

[Astrid]

lilycat- what's T.H.E.? I dont remember seeing that as an option...
thanks!

 

[LoanGrl]

K's mom, you have good advice. We always caution people to read the fine print and NEVER consolidate loans with someone else. I work for NOWLoans, and we have no fees (at all) on our Stafford loans. You can find more information on our web site at <a href="http://www.nowloans.org" target="_blank">NOWloans.org</a> A lot of loan programs offer great repayment benefits, as do we, but it's not in your best interest to make a decision on repayment benefits alone. Make your decision on the benefits you get NOW. Yes, we want students to use our loans, but we understand we aren't a perfect fit for everyone and if it's in your best interest to find your loans elsewhere, we'll tell you. You can also use your financial aid office as a resource for advice. The government sets the interest rates on all Staffords, but lenders have various benefits for students that can save money. Several schools are also direct lenders, the only disadvantage there is that they usually don't offer the "no fees" advantage that other lenders do. Good luck to everyone!

 

[Astrid]

out of curiosity, what type of benefits (besides a reduction in fees) could you get NOW on your loans?

 

[LoanGrl]

Look for no fees, for one. That will save you money because you will get the full amount that you've been approved for. That's the biggie. NOWLoans is a Sallie Mae lender, so we also offer the Cash Back thing. You can either have a check or have credit applied to your loans, which saves you interest. Make sure whatever lender you uses charges you NO guarantee fees and NO origination fees in order to get the full amount. We (through Sallie Mae) also offer an alternative private loan, the Signature Student loan, that has no fees if you or a co-borrower has excellent credit. That's a good option if you need more money than the Staffords allow. But all lenders are offering Staffords at the same interest rate, because the govt. sets that rate. I know it's confusing, but remember knowledge is power. If you are informed, you make better decisions.