Selling loans = loosing borrower benefits?

Do you wonder if selling loans will lead to losing borrower benefits?
Choosing a lender can be one of the most important decisions you’ll make when borrowing money to pay for school. Be sure to take into account the savings offered by each lender such as origination fee discounts, interest rate reductions, or rebates. To help you make the best possible choice, consider the following information.

Under federal guidelines, lenders are allowed by law to charge an origination fee of up to 3% of your gross loan amount. Some lenders offer you discounts on this fee, while others may offer special discounts or rebates for making a number of consecutive on-time payments. For more information, see the Loan Cost Comparisons of KHEAA’s Major Lenders. Loan costs change periodically, so you should contact the lender for the most current information.

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Loan Cost Comparisons of KHEAA’s Major Kentucky Lenders
o Federal Stafford Loans
o Parent PLUS Loans
o Graduate/Professional PLUS Loans

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Loan Cost Comparisons of KHEAA’s Major Alabama Lenders
o Federal Stafford Loans
o Parent PLUS Loans
o Graduate/Professional PLUS Loans

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Loan Cost Comparison for Alternative Loans

The Kentucky loan cost comparison chart is provided in the popular Adobe Acrobat™ format. If you need the free Adobe Acrobat Reader™ software, you can download it by clicking on the Get Acrobat Reader™ button below.


Following are important questions to ask about lenders you are considering for your student loan.

Does the lender provide origination fee discounts, interest rate reductions, forgiveness of principal, or other incentives?

The bottom line is that discounts and other incentives can save you money! Lenders are not allowed to provide an origination fee discount prior to disbursement for PLUS loans.

Does the lender sell its student loans?

Many lenders sell their loans to other holders or secondary markets after the loans have been disbursed. When your loan changes ownership, the servicer may also change multiple times during the life of your loan. It is important that you stay in touch with your loan holder and/or servicer to ensure you fulfill your repayment obligations.

Does the lender use a servicer?

Many lenders use loan servicing agencies, or servicers, to handle the day-to-day work on their student loans. Servicers handle not only borrowers’ questions about their loans, but also repayment and deferment issues. Since the borrower/servicer relationship is often long-term, it is important for you, the borrower, to know who you are dealing with. Some lenders service their loans locally and some use out-of-state or national servicers.

Does the lender require a credit check?

Federal regulations require that credit checks be performed for all Federal PLUS Loan borrowers. However, some lenders may require credit checks for Stafford Loan borrowers as well.

Does the lender require a "customer relationship"?

Some lending institutions, such as credit unions, require that you are a member of their institution before they will accept your application.

Does the lender offer Federal Consolidation Loans?

You are required to make payments to each lender that makes a student loan for you. If, throughout the course of your education, you borrow from more than one lender, you may be eligible to consolidate those various loans into one loan. By doing so, you will only have one payment to make to one lender each month. You may also reduce the amount of your monthly payments once your Consolidation Loan is approved. However, you may lose certain other benefits, such as deferment options, so consider these carefully before consolidating your loans.

As an alternative to a Consolidation Loan, some lenders are willing to buy or sell your loans from/to other lenders. This allows you to retain the same benefits on your loans and make one monthly payment. You should contact your lenders to determine if this is an option for you.

What is a preferred lender list?

Many colleges provide student borrowers a list of lenders to consider. These lists are developed by the colleges under a wide variety of objectives which may include some of the following: (1) prior service provided to borrowers at that school, (2) discounts or other borrower savings provided at loan origination time, (3) savings provided to borrowers during repayment of the loan, (4) proximity of banks/lenders in the area where the college is located, (5) electronic processes offered to student borrowers and the college financial aid office necessary for efficient and timely delivery of funds, and (6) cancellation provisions for borrowers who enter certain professions after graduation. These lists are suggestions and are provided as a convenience to the borrower for consideration. As a borrower, the ultimate decision on which lender to use rests with you--compare the origination fees, discounts, and other savings each lender offers and choose the one that is best for you.

Once I’ve compared lenders and the benefits they offer, how can I make sure I get the benefits I’m looking for?

Different lenders may have several different Lender ID Codes, and each code may have different benefits associated with it. Be sure to use the correct Lender ID Code when you fill out your loan application.

Loan Consolidation For People Who Make Less Than 30000

Uhm...should I get a credit union loan?

I have less than $9,000 in credit card debt. I would like to have one bill but want to know what are the pros and cons to getting a credit union loan to pay them off this way. The cards are all in excellent standing but I do not use them anymore and I keep one for emergency purposes. Should I go for the credit union loan and pay them off or pay them individually like I am now?

Hmm...Credit Unions are easier to get loans from, and their interest is usually a little lower then banks.

But take this warning with you. Over the past several years, lots of people have been suckered into getting consolidation loans, home equity loans, or refinancing homes in order to pay off credit card debts. Then those people turn right around and charge up the now-empty cards all over again. They are now in twice the debt, with no hope of getting out. The end up filing bankruptcy.

Last year many thousands of people did just that.

If you plan to go this route, you MUST control your credit spending. Don't close your credit accounts, but rip up the cards so you can't use them for a while. Call and get the credit limits lowered to around $500, and don't let them jack them up again (they will, trust me).

This is exactly what has happened to many of the people I am trying to help out. Credit card companies make it so easy for you to get credit these days.

ACFS Loans 2007 - ACFS invites you to share this free program with your friends, family and/or acquaintances

Just have read that ACFS Loans offer a new free program. In a nutshell, they say:

"we diligently strive to maintain our status as the industry leader in customer service. We invite you to share this free program with your friends, family and/or acquaintances. ACFS realizes that word-of-mouth referrals are invaluable. To demonstrate our gratitude, we provide you with $100 for each qualified referral who completes a Freedom Consolidation Loan with ACFS. To submit a referral(s), simply complete this form and return it to ACFS. Thank you for selecting ACFS as Your Answer to Student Loan Debt Management"

Reconsolidation Student Loan 2007 - Many Lenders Provide Significant Discounts.

Although 90 percent of students have some type of financial aid, last year’s seniors racked up an average of $17,300 in student loan debt.

For many, taking out a loan is inevitable. Financial aid director JoAnn Laugel said the 60 percent of students who had federal loans last year requested about $5,500 each.

But taking out a loan is better than resorting to credit cards, she said, which often accrue more debt through higher interest rates. Loans are also debts to be repaid, Laugel said, but students cannot get a four-year interest-free loan for anything else.

The first step in the loan process—for undergraduate and most graduate students—is filing for the FAFSA. The Indiana deadline is March 10.

Laura Freeman, Old National Bank student loan administrator, said the FAFSA enables students to learn how much money they are entitled to in scholarships and grants, as well as if they qualify for a federal Stafford loan.

Federal loans are the best type students can get, Freeman said, because they generally have lower interest rates and fees than private loans.

Laugel said UE provides a preferred lender list for federal and private loans.

“There are thousands of players, that’s the reason we have six,” she said.

Lisa Rollings, Citibank senior account manager, said students should look closely at what lenders are offering as many provide significant discounts.

“Some benefits are only if you pay on time, and some are up front,” she said.

If students plan on consolidating their loans—taking out one to pay for others—the up-front benefits will work best for them. But, typically, Rollings said students who consolidate loans pay more in the end as interest from lower monthly payments adds up.

Although consolidation can be beneficial, Freeman said one of the biggest problems is students who did not consider the size of payments, often $200 per month for those with $17,000 of debt.

Laugel said that is why UE offers exit counseling for graduating seniors—some becoming financially independent for the first time—to help them learn about sorting their finances. Sessions will be set toward the end of the semester.

While balancing loan payments might be difficult for some, UE students have been above the national average for keeping up with payments, she said.

According to the U.S. Department of Education, the national rate for students not making payments on time for the 2004 fiscal year was 5.1 percent. Laugel said UE had a 1.7 percent default that year, and the 2005 fiscal year was at 1.1 percent.

“Just that 1 percent defaulted,” she said. “It’s a sign students are getting good jobs with a UE education.”

And if students are having problems making loan payments, Rollings said they should contact their lender.

“Make sure you communicate with your lender,” she said. “If you move, if you have any updated changes like marriage, changing your name or financial situation changes, call.”

If students communicate with lenders, Rollings said most are more willing to give them options and even briefly accept lower payments.

But Laugel said loans are not the only way to help pay for college. Ongoing scholarships from outside UE are available for all students

Financial aid has a notebook of scholarships in the office and the list is also posted at evansville.edu/prospects/financialaid/currentstudents.

F.A.Q.: Reconsolidation Student Loan 2007

I'm browsing thru Federal Consolidation Loan FAQ and just making notes of what not to forget...OK, let's see:

What is a Citibank Federal Consolidation Loan?
A Citibank Federal Consolidation Loan combines several existing federal student loans into one new loan. You can enjoy the convenience of lower monthly payments, a single fixed interest rate and one monthly payment.

How can I consolidate my loan with the grace rate?

You have the option of consolidating your loan during your grace period and taking advantage of a rate as low as 3.50%. It is important to remember that you must indicate the month and year of your grace end date in #26 on the Consolidation Loan application if you would like to hold the processing of your Consolidation Loan until the end of your six-month grace period. The rates in effect at the time that you apply for your Consolidation Loan will be used in the weighted average calculation to determine the rate on your Consolidated Loan.

Will the reduced interest rate that I am receiving due to borrower benefits on my existing loans be used to calculate the fixed interest rate on my new Consolidation Loan?

No. Interest rate reductions received as borrower benefits on existing loans will not be considered when determining the applicable interest rate on your consolidation loan. For example, if the applicable rate on your existing loans is 6.80%, but you were receiving interest rate reductions as a borrower benefit that reduced the interest rate to 5.80%, the interest rate used to calculate your new Consolidation Loan will be 6.80%.

How can I find out what my Consolidation Loan payment will be?
To estimate what your payments and total amount of interest paid may look like, input various interest rates into our Loan Consolidation Calculator. After your application has been approved, the disclosure and monthly account statement will include your exact payment amount and interest rate.


Can I consolidate my loans while I am attending school? (!!! - NB)
If you are currently a full- or half-time student, you can apply for a Consolidation Loan upon graduation. For loans disbursed prior to July 1, 2006, the interest rate during the grace period is 0.60% lower than the Stafford repayment rate. By consolidating while you are in grace, you will have the opportunity to secure a lower interest rate and start paying down your student loans.

Can I get an in-school deferment on my Consolidation Loan? (!!! - DONT FORGET TO ASK ZEE !!)
If you are attending school at least half-time you will be eligible for an in-school deferment on your Consolidation Loan. Keep in mind that you will need to begin repaying your Consolidation Loan immediately upon graduating, withdrawing, or dropping to less than half-time enrollment status. Citibank offers a special Consolidation Loan four-month Lender Option forbearance that may be considered to help you ease into repayment.

loan help 2007 - my personal F.A.Q.

Frequently Asked Questions on loan help in 2007 - that's the questions I ask myself, you know...+609 or -711 - doesnt matter.

Any ideas on how to handle it better? I'm just making a quick TODO list:

What is the benefit of a Federal Consolidation loan?
How much can I lower my monthly payments?
What is the interest rate on a Federal Consolidation Loan?
How can I lower the interest rate on my loans even further?
Do I get a grace period on my consolidation loan?
How long will it take for you to get my loans consolidated?

OK, now - Applying

What do I need to do?
How do I know if I'm eligible for a consolidation loan?
How much does it cost to consolidate my Federal Loans?
What if I don't know who currently holds my loan?
Will you check my credit before approving me for a consolidation loan?
Should I continue paying on the student loans that I am consolidating, while my application is in process?

Now, the core question - Repayment

Once I have taken out a Consolidation loan, can I add any new loans to it?
What are my repayment plan options?
When do I start repaying my loans?
If later I decide to switch to a different repayment plan, can I do so?
Can I pay more than the minimum loan payment required for each month?
Are deferments and forbearance allowed under a consolidation loan?

You guys know the right answer? Shoot me a message then.

NB: loan cons direct loan for 2007

I've been looking for info on loan cons direct loan for 2007, found some:

"We're encouraging our students to consolidate in the Direct Loan Program very heavily," says Mohan Boodram, director of admissions and financial aid at the Harvard Medical School. There, student loans are serious business: The average debt of the class of 2007 was $91,000, approximately half of it federal loans. "There really is no downside to doing an in-school consolidation when interest rates are as low as they are today."

"There are some things the Direct Loan Program offers that the other programs don't offer," adds Susan Gilbert, associate director of MBA financial aid at Harvard Business School.

At the GSE, where last year's graduating doctoral students carried an average debt of $55,000, White notes an irony in all the loan consolidation information flooding students.

White encourages her students to learn as much as they can about loan repayment and pursue the plan that best suits their individual situation: often Direct Consolidation Loans, but sometimes, no consolidation at all. "The trick about consolidation is it's not one-size-fits-all," she says.

Financial aid professionals stress that students should consider the impact of consolidation on some of the benefits of their original loan, such as a postgraduation grace period on payments or special loan forgiveness circumstances, that may not transfer to a consolidation loan.

Reconsolidation Student Loan 2007 - A New Grad Question

I spotted an interesting exchange of opinions:

posted February 17, 2007
I'm a new grad, my grace period ends this June. I was wondering if any one on here has consolidated the loans from school, and if so what was the process like, are you glad, how long did it take and what the company name is.

Thank you
DL

Buddy T DC replies back:

Consolidate and lock in the rate. It doesnt get much lower than it is right now. It's a no brainer. Shop around and see what rate and deals you can get. Some offer to drop the rate with 24 consecutive on time payments, some offer a certain percentage back up front when you consolidate. Figure out what's best for you.

Most of graduates leave school with $19,000 in debt - but there is a way out.

Shortly after graduation, many college students feel like they've been hit like a ton of bricks. Moving out into the real world and trying to secure a new career are hard enough without having to deal with a stack of student loan bills.

According to the National Center for Education Statistics, the average college graduate leaves school with $19,000 in debt, a figure that can be overwhelming, particularly for someone just starting out; but it becomes more manageable when you consolidate.

College loan consolidation will not only provide you with more money at the end of each month, but help you secure long term savings as well. If interest rates are low when you consolidate your student loan, you will enjoy putting that extra interest you are currently paying back into your pocket for the life of your loan, or using it to pay off your loan faster.

How to make the most of your money in 2007

A short time sorting out finances could save hundreds.

Spending just a small amount of time to find the best student loan deals could save hundreds of dollars.

It's really important to shop around to make sure that you get the best deal on loan.

Tips on how to borrow wisely

If you do take advantage of the discount a store card offers, make sure you pay off balance at the first statement to avoid interest charges.

Check interest-free credit deals are completely free of interest.

A credit card charging zero per cent on new purchases is a wise way to borrow, but make sure you pay your balance before any high standard interest rates come in.

A credit card balance transfer could save money, and there are still some cards that do not charge the typical two or three per cent per transfer fee, but be careful not to be caught out by cards without a maximum transfer fee as some cards cap fees at $100 or $200.

Personal loans have some of the lowest interest rates but are best used when you want to borrow a large sum of money over longer periods, as rates are higher for smaller amounts. However, this needs to be balanced against taking longer to repay the loan which can result in paying more interest.

Watch out for payment protection insurance on credit cards and personal loans. It is unnecessary, expensive and gives limited cover.

Your home is at risk if you secure a loan against it. Use your home as security only as a last resort.

Source: myfinances.co.uk