I have all of my undergrad loans through Sallie Mae, so I'll probably use them out of convenience.
On a side note...Damn I'm gonna be in debt!!!
Yep, we are going to be knee deep in debt, that's why I wanted to find a lender with the best incentive so I can save a few bucks
After spending about an hour online and on the phone with lenders, here's what I found out. I hope this helps someone
Disclaimer: read at your own risk! I am not a financial guru and am only regurgitating info
The best way to compare prices on a student loan is to match up the interest rates with all other factors held equal. But when lenders offer different types of discounts at different points in the repayment process, comparisons arent easy.
How do you compare a fee reduction with a lower interest rate? What about an interest rate reduction that doesnt kick in until the fifth year of the loan?
The table below shows how to compare some typical types of discounts offered by companies that provide federal student loans. The most common federal student loans (Stafford loans) have a fixed 6.8% interest rate before any discount.
Discount Offered Equivalent Value
1% reduction of interest rate at start of loan
1.00%
1% lower interest rate at start of repayment (after 4 years of interest accrues without discount while student is in school)
0.78%
1% lower interest rate after 48 payments (see warning)
0.33%
1% reduction in fees charged to the borrower
0.23%
1% reduction of principal after 48 payments (see warning)
0.12%
Bank of America: 0.25% reduction with ACH payment, 2% reduction after 36 months of consecutive on time payments, $500 balance forgiveness
Chase: Zero origination fees, 0.60% rate reduction for ACH payment, 1% rate reduction after 12 months of consecutive on time payments, 1% rate reduction after 36 months of consecutive on time payments
Sallie Mae: Zero origination fees, 2% rate reduction after 24 months of consecutive on time payments, 1% rate reduction after 48 months of consecutive on time payments
College Board: 3.3% rate reduction after 33 months of consecutive on time payments, zero origination fees
Best incentive, IMHO, was with University Federal Credit Union. Here's the link to their terms.... and no I am not associated with any of these financial institutions
http://www.ufcu.org/accounts/loans/education/index.php