Private College Student Loan

What stafford loan lender would be the best?

Sallie Mae Education Trust 802218 Effective for loans guaranteed on or after June 9, 2008 0.25% Interest Rate Reduction for automatic debit Nelnet 833669 0.25% interest rate reduction for borrowers who make payments using our auto-debit process. KeyBank 811025 Zero Default Fee .25% interest rate reduction for direct debit payments from any checking or savings account Interest is only capitalized once at the time of repayment Easy online application with e-Signature feature PNC 809402 0 Default Fees with participating guarantors .25% interest rate reduction for auto debit from ANY bank account SunTrust Bank 820564 Effective for loans disbursed on or after June 9, 2008: 0.25% interest rate reduction for borrowers who sign up for ACH Easy online application process and e-signature option Fixed Interest Rate - 6.0% for subsidized undergraduate and 6.8% for unsubsidized 24/7 Online account access No pre-payment penalties Flexible repayment options Wachovia Education Finance 830005 Effective for all loans disbursed on or after July, 1 2008: 0.25% interest rate reduction for ACH No pre-payment penalties Flexible repayment options Free “Money Smart” financial literacy program on line Free Checking, Savings, ATM cards AMS 833067 Effective for loans guaranteed on or after June 9, 2008: 0.25% Interest Rate Reduction for automatic debit ALSO, how much should I borrow?..this 2008-2009 semester is 6,300..how much would I borrow? I am getting financial aid done also so yeah. but havent received anything.

Public Comments

1. all those numbers and payment options aren't anything important. All Stafford loans are the same, they are all equally good. The thing I always look out for when gettin a stafford loan is which company has been around the longest! If you have a national chain of banks on the list thats usually the best choice. Since when you initially apply for the loan you check off the little box that says you agree to allow "(whomever you are getting your loan from)" to sell your loan to a different company. This can cause problems. Lets say you are done with school and are paying back your loans. You write a check or money order or whatever and send it off, before the company receives your payment they sell your loan and the new company is on your A$$ because they havent gotten the payment you sent to the previous company who previously owned your loan :/ this happened to a buddy of mine and he had to dig through months and months of checks he had written for the past year to findproff that he send his payment.!!!! Best bet is go with a bank thats on the stafford loan list.
2. Hi- I would go with Sallie Mae- its the largest Stafford lender and is unlikely to pull out of the student loan business. Several of the other lending institutions on your list have stopped making private student loans and/or are in trouble with other types of loans. The terms you see there may not be applicable if the loan is sold and it will not be fun to have to worry about possibly finding a new lender next year. Many students this year have been approved for loans, but have had to scramble at the last minute when their banks suspended operations.
3. Okay, I'm going to disagree with a couple of the other respondents, so take this for what it's worth. No matter where you get your Stafford loan, most things are going to be exactly the same. The Stafford loan program is a government lending program, but private lenders "sign up" to participate and offer these loans. Anyone who signs up must agree to offer exactly the same loan, using exactly the same application process, completed on exactly the same documents, with exactly the same interest rate and repayment terms. Once upon a time, not that long ago, there were considerable differences between Stafford lenders, because the government paid these lenders a tidy little profit for every loan they made. Because these loans were profitable to the lenders, some of the banks would take a little bit of those profits and offer "incentive" deals to the borrowers so that you would choose to borrow from them and not one of their competitors. In the last year or so, the government has really whittled down most of the lenders' profits, so the lenders responded by doing away with pretty much all of the incentive programs. The only common incentive program that you see today is one that you'll see with all of the banks that you listed above - if you'll agree to allow the bank to auto debit your payment every month, they'll give you one quarter of one percent off your interest rate. That doesn't sound like a lot, but it can make a difference of several hundred dollars over the life of the loan. As you can see, though, pretty much everyone is offering that deal - so that doesn't give you much to choose from. (Also, keep in mind that an auto-debit agreement puts the bank in charge of when your payment gets made - if you envision a future where you might sometimes be juggling money from one source to another to try to cover your loan payment by its due date, you might not want to give the bank carte blanche to just help themselves to your checking or savings account every month). What should you look at? I'm going to disagree a bit with the respondent who told you that it's good to stick with only the big banks - and there's a reason for that. Almost every lender that makes Stafford loans will turn around and sell your loan to another company. That won't matter to you, because you'll still owe exactly what you owed before - and your loan terms will still be exactly the same - but you'll get a letter in the mail telling you to make your payment to someone else every month, instead. Even if the bank doesn't sell your loan - very few banks actually "service" their own loans - that means they'll turn your loans over to a large servicing company to administer your repayment. The largest of these loan servicing agencies is Sallie Mae, so no matter who you actually borrow from, there is a good chance you will wind up making your payments to Sallie Mae (or some other large loan servicing company) every month. It doesn't really matter who you borrow from - even if that bank is out of business by the end of the week, you'll still pay your loan back exactly the same - you'll just pay it to someone else - and who you make your payments to shouldn't really matter all that much to you. The only thing in your list above that stands out is the Key Bank offer that your interest will only be capitalized one time, when you begin repayment. That's a very good thing, which can save you several hundred dollars. I'll explain: Remember how a student loan works - you won't begin repaying the loan until 6 months after you finish school - however, interest is added to your balance every single month from the day you receive the funds until the day you make your final payment. While you're in school, and not making payments, the interest just keeps getting added, unpaid, to the balance. Think about what that means: I borrow $100 and the next month, I owe $2 in interest. Now my balance is $102, so the next month, my interest is based on a balance of $102, not $100 - this continues every month, and you can see that every month I'm paying interest on that unpaid interest. When a lender capitalizes your interest only once, that means that they're going to keep track of your interest, but they'll add it on to your balance all at once, when you begin repayment, rather than add it every month. That has the effect of keeping you paying interest only on the original amount you borrowed, rather than on the principal plus interest. Long answer, but I hope this helped you understand your situation a little better. Good luck!