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Author Topic: Private Student Loans
Lyrhawn
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So after exhausing all my other options, which turned out to be far less than I would have liked, I need to secure a private loan to cover the rest of my tuition for this Fall semester so I can register for the Winter, preferably very soon. Hopefully this won't be a problem come the Winter, but that's a bridge I'll cross when I get to it.

But I'm having a bit of a time trying to parse through the different banks and loan offers out there. I started at Finaid.org and am looking at the tables they have and the information offered, but I'm still sketchy on which is the best one to go with. I have a very credit worthy cosigner, which should help matters as far as the interest rate goes, which has me somewhat nervous.

Are internet loan places really good options? I see ads for places like Astrive on TV all the time, and my brother even has an Astrive loan, and even though I actually have an online bank account through HSBC, I'm somewhat leery of banks that lack brick and mortar locations. It's a reaction not necessarily based on any concrete evidence I'll admit, but are they as trustworthy as well established banks?

I've sort of come around to Citibank and a CitiAssist student loan. I guess the LIBOR rate is better than the Prime rate, but if I can get a good rate with my cosigner, then it might work out better anyway even with a Prime rate. I don't plan on taking the full two and a half decades to pay off the loan. If I can get all the money I need for the rest of college through government loans (which is maybe a 50/50 shot apparently) then I hope to pay off this particular loan in the next couple years, which I've actually done once before. I'm generally very, very aggressive when it comes to bill paying.

I'm probably going to check out the application stage tomorrow and see what needs to be done, but I thought I'd check here first to see if anyone has any advice that I might have missed as far as choosing which lender to go with. They all seem rather the same to me in many ways, so I figured I'd pick one with a decent name, good interest rate deduction bonuses, and a relatively low interest rate and fees.

Anyone think I missed anything?

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Mucus
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quote:
Originally posted by Lyrhawn:
... even though I actually have an online bank account through HSBC, I'm somewhat leery of banks that lack brick and mortar locations.

As a note of unrelated interest, in September* HSBC was the second largest bank in the world, ahead of all US banks, and with a decent number of locations here in Toronto and (from friends) many in Vancouver.

*(Now, with all companies racing to the bottom, who knows)

The Hong Kong Shanghai Banking Corporation, as its name hints actually prints much of the paper money used in Hong Kong, a task it shares with two other banks.

Just thought that might be interesting.

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Morbo
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I used the website below as a resource to help me get out of default on my loan. Maybe it will help you find one. Good luck!
http://www.studentloanborrowerassistance.org/

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Lyrhawn
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quote:
Originally posted by Mucus:
quote:
Originally posted by Lyrhawn:
... even though I actually have an online bank account through HSBC, I'm somewhat leery of banks that lack brick and mortar locations.

As a note of unrelated interest, in September* HSBC was the second largest bank in the world, ahead of all US banks, and with a decent number of locations here in Toronto and (from friends) many in Vancouver.

*(Now, with all companies racing to the bottom, who knows)

The Hong Kong Shanghai Banking Corporation, as its name hints actually prints much of the paper money used in Hong Kong, a task it shares with two other banks.

Just thought that might be interesting.

I wish they'd open up some ATMs around here, or that they'd offer free ATM withdrawels like WaMu does. I'm still sticking with HSBC because they offer a dramatically higher interest rate than my credit union does, even though it's three points power than it was when I signed up.

Morbo -

Thanks, I'm checking it out right now.

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rivka
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Many times, there is no one best option. Be sure you are comparing loans with the same terms (a 30-year can look much better than a 10-year, if you're just looking at interest rate or monthly payments); then start by comparing interest rates. Most of the perks (lowering interest rates after a certain number of on-time payments) will only kick in for a small percentage of students. Be realistic -- are you going to be one of them? If not, ignore them altogether. The one thing that does matter (although not usually as much as the base rate) is fees/points. Don't forget to check them too.

LIBOR, Prime -- it doesn't matter. Just figure out what the current rate is, and compare them. (The companies pick an index and work it. Comparable loans will end up with very similar rates, regardless of which index they're adding their +x% to.)

I'm a bit sour on Citibank this year: they refused to fund Stafford loans for students at a number of schools this year, on a school-by-school basis. (Schools aren't legally allowed to do the reverse, but this is legal. And a real PITA for a bunch of students.) Nonetheless, their CitiAssist loans are quite good, and they are a stable and well-known company.

As for Internet-based companies, I evaluate them on an individual basis, just like brick-and-mortar ones. I don't happen to know much about Astrive.

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Lyrhawn
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Thanks rivka, I was going to email you specifically, but I wanted to try and do 99% of the work myself (plus I didn't want to bug you [Smile] ).

I think I've got everything, except I plan to call Citibank tomorrow to ask about a fee I hadn't considered. They apparently don't charge any sort of fee for issuing the loan, but I need to check and see if they have penalties for repaying the loan early. I like to pay things off when I have the money rather than let it sit there and rack up interest that I'll have to pay off later, and rather than let this thing sit for years and years and cost me extra hundreds or thousands of dollars, I WILL make some payments on it, even if they are tiny, but if they charge a penalty on it, I might look elsewhere for someone with comparable rates that doesn't charge penalties.

I can't wait until I have this weight off my shoulders. Hopefully I can get this done in the next couple days, which will destress me just in time for the run-up to finals.

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rivka
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Heck, all those seminars I attend ought to be put to some good use. [Wink]
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