KyGrlDr2B

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I know this belongs in the financial aid forum, but no one posts there except people with questions, so I'm hoping someone will answer this before it gets moved....

Some of us are wondering about getting Direct loans straight from the government or stafford loans through a lender. Any advice would be appreciated. I figure this is the best place to ask because most of you have already dealt with this prob.
 

lilycat

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I also answered this in the fin. aid forum, but I used T.H.E. (as did the majority of students I know). I'm not sure if there are special incentives going direct from the government, but T.H.E. has no origination fee and very good incentives in the repayment stage (lowering the interest rate).
 
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lilycat

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It's a private bank that I used for my Stafford loans. This is the website: <a href="http://www.northstar.org/" target="_blank">http://www.northstar.org/</a>
 

Mary Jane Watson

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Hey barcher!!

What's up future classmate? You are going to UAB? At UAB there is a Direct Loan... you don't go through another bank. There is a fee they charge you too which sucks, but it's what we use.

Take care and see ya in July (Or April 12 if you're going to 5 points...)! I'm hoping some of the older students go so I won't feel as old... If I recall we're about the same age... graduated from college in '95.. will be 29 this year <img border="0" title="" alt="[Eek!]" src="eek.gif" />

See ya!
 

barcher

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Hello back to you kiddoc2B,
Yes I will be your fellow classmate at UAB and I will turn 29 <img border="0" title="" alt="[Eek!]" src="eek.gif" /> the day of our white coat ceremony. Thanks for the information on the loans. My wife is a second grade teacher, so we will need our income supplemented. I can't wait to get started and look forward to meeting everyone in July.
 
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KyGrlDr2B

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Thanks for the info lilycat. My school sent us a packet with several lenders suggested and information about each one. Medloans appears to be the best one, so far. This one does have an origination fee, but has other incentives--lowering interest rate after paying a certain # of payments on time, lowering rate for paying online, etc.
 

Astrid

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Hey KyGrlDr2B- I cant decide!! Do you really think the Medloans that are serviced thru sallie mae is the best deal? all those cash back credits sound nice, but i dont see that they offer to lower your interest rate. do you think it;s better to get the cash back, or go with another lender that lowers your interest after such-and-such number of payments?
i was thinking that Access Group (#7 on the UK list) looked pretty good b/c there's no fees, plus the lowering of the interest rate.
hum. decisions decisions.
just wondering your opinion.
 

NastyC5

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Astrid: This is KYGRL (I'm at my bf's and forgot my password, lol). Anyway, Did you go to the financial aid seminar in January at UK? They handed out brochures from some lenders and one was Medloans. That was where I was getting my information on Medloans at. They have a website you can go to that has almost all the same stuff. I'll have to look into Access Group. I haven't decided definitely, this was just after skimming everything. At the seminar, I got the vibe that Linda Gilbert recommended Medloans as a good one, because she kept mentioning and saying that a lot of students use that one.

I wish this was easier! Too many choices! :rolleyes:
 

LoanGrl

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Hi everybody. I have posted answers on a couple of other threads; I sometimes hate to jump in and answer questions since I work for NOWLoans, I try to give other students a chance to answer. Don't choose a lender based solely on repayment benefits; look for a lender that charges no fees because you will receive all you're approved for and receive that benefit right off the top. The interest rate is the same for all Staffords, because those are government loans and the govt. sets the interest rate. However, if your school is a Direct lender, you may end up paying origination and guarantee fees. That's usually the difference.
NOWLoans is a Sallie Mae lender, only we charge NO origination fees and NO guarantee fees. And we have the Cash Back benefits that Sallie Mae offers, along with the alternative private loan.
You can find more information at <a href="http://www.nowloans.org" target="_blank">nowloans.org</a>.
A lot of students have begun using our web site as a resource, (regardless of what lender they ultimately choose) and we are going to update it to provide more information. We understand that we aren't the perfect fit for everyone, but we want everyone to be able to make informed choices and choose what's best for them. Remember, knowledge is power, and saving a little money may not sound like a big deal now, but you are going to have to pay all that back plus interest eventually. Good luck to all of you!
 

Astrid

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KYGRL: no, i wasn't able to go to the financial aid seminar in Jan. so i feel a little out of the loop. but they did send me a big blue folder with a bunch of info in it. i guess i'll re-skim that b/c i've just been using the most recent mailing with the Financial Aid Request Form. I'll check out the website for Medloans too.
Let me know if you come across anything interesting!
yep, too many choices.
 

eagle26

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</font><blockquote><font size="1" face="Verdana, Helvetica, sans-serif">quote:</font><hr /><font size="2" face="Verdana, Helvetica, sans-serif">Originally posted by LoanGrl:
<strong>Hi everybody. I have posted answers on a couple of other threads; I sometimes hate to jump in and answer questions since I work for NOWLoans, I try to give other students a chance to answer. Don't choose a lender based solely on repayment benefits; look for a lender that charges no fees because you will receive all you're approved for and receive that benefit right off the top. The interest rate is the same for all Staffords, because those are government loans and the govt. sets the interest rate. However, if your school is a Direct lender, you may end up paying origination and guarantee fees. That's usually the difference.
NOWLoans is a Sallie Mae lender, only we charge NO origination fees and NO guarantee fees. And we have the Cash Back benefits that Sallie Mae offers, along with the alternative private loan.
You can find more information at <a href="http://www.nowloans.org" target="_blank">nowloans.org</a>.
A lot of students have begun using our web site as a resource, (regardless of what lender they ultimately choose) and we are going to update it to provide more information. We understand that we aren't the perfect fit for everyone, but we want everyone to be able to make informed choices and choose what's best for them. Remember, knowledge is power, and saving a little money may not sound like a big deal now, but you are going to have to pay all that back plus interest eventually. Good luck to all of you!</strong></font><hr /></blockquote><font size="2" face="Verdana, Helvetica, sans-serif">Thank you for the information. I'm not sure what I'll do for loans yet, since I haven't received a financial aid package yet. Can I send you a private message? I have some specific questions about loans, loan eligibility, and previous student debt. Thanks.
 
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KyGrlDr2B

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Astrid:
I dont know if you figured out your loan situation yet, but I spoke with Linda Gilbert about the t.h.e. loan. She said she hasn't dealt with it a lot, but she hasn't heard anything bad about it. She said she just simply receives info from so many lenders that she doesn't talk about every one of them. I just thought I'd let you know, I believe that is what I'm going with--no fees, etc. Everyone on this forum seems to believe in it <img border="0" title="" alt="[Wink]" src="wink.gif" /> .
 

Astrid

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KyGrl: thanks for the info. I actually decided to go with medloans. Not really sure why except that it seemed like a pretty good deal and I was a little concerned re: using an outside lender b/c i thought i might run into some difficulties with coordination with UK fin aid, etc. i'm just paranoid :) see you in aug!
 

paean

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If your school participates in Direct Loans, read no further, you have no choice of lender, and have to accept the gov't not-so-great terms. If your school doesn't use direct loans, you will have to choose a private Stafford lender (all Stafford loans are guaranteed by the gov't, which makes them appealing to lenders). If you are planning on borrowing to cover most/all your costs, choose carefully. The difference between different lenders can be as much as $10,000 throughout the life of your loan. Things to look for:

Are there originations/guarantee fees?
Are there "rebates" like the one SallieMae offers?
Are there interest rate reductions, when do they kick in, how much, etc.?
Do you only get incentives (rebates, interest reductions, etc.) if you pay every single payment on time?
When does the lender capitalize interest?

You all took algebra, and hopefully pre-calc or stat, so you should be able to figure out the exact cost of your loan, and how much different ones will save you.

The best lender I found so far (I went to about 12 lenders' websites recommended by different FAOs) was T.H.E. &lt;www.northstar.org&gt; which is much cheaper than MEDLoans/SallieMae. In general interest reductions help you a lot more than rebates.

If you choose a lender who charges fees, EVEN IF YOU GET THE FEES BACK IN REBATES, you accrue interest on the fees until you enter repayment and get the fees rebated. That means that paying 3% and being charged interest on money you never saw and then getting 3.5% back 4 to 7 years later (will you defer during residency?) is a lot more expensive than no fees in the first place.

The single most important thing to look at is the interest rate once you enter repayment. While it is capped at 8.25%, some lenders figure it differently, which means you will always be paying 8.25%, while others will have you pay less during economic times like today. The next (or maybe this is more important) is to choose a lender that will capitalize interest only once, right before you enter repayment. Most recommended lenders do this, but be very careful, or you could be paying far more that the $10,000 possible difference I mentioned above. Capitalization means that they all accrued interest to your principle, which means that you are now paying interest on interest. All lenders capitalize, the question is when, and how often.

Above all, talk to the people in financial aid. If you can't figure out how to calculate the total cost of a loan, they should be happy to show you. An okay rule of thumb, assuming you enter repayment after 3 years of residency, and take 10+ years to pay off the laon, is that you will have to pay (in todays dollars, I can't predict the influence of inflation) about 3 times what you initially borrow. Kind of staggering, isn't it?
 

trouta

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I talked some with the people at T.H.E. this last week toexplore their program. They offer some great incentives including allowing you to pay off your interest before capitalization thereby preventing yourself from earning interest on interest and principal.
 
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