
Which stafford loan lender should i choose???
my loan is subsidized, and im just entering my first year of college. I’m borrwoing 3500 for this year. here are the lenders my college recommend:
1. citibank: 1% origination fee and 1%default fee
0.5%interest rate reduction immediately upon entering repayment
0.25%interest rrate reduction when using ACH
zero payment for last 6 months when all payment are made on time
0.5%interest rate reduction renstated when deliquent borrower makes 24 consecutive ontime payment
2. Bank of america:
0% fees
0.5%interest rate reduction when using ACH (don’t know what that is)
3. Nelnet
1% origination fee and 1% default fee
Zero payment for last five months when all payment are made ontime
Two months of payments waived when using ACH.
Which one should i choose, plz help. im waiting online, so if you need more info, just leave message and i will response immediately.
OK, first of all ACH is automatic clearing house – meaning you set up your account for automatic payments to be deducted from your checking account every month.
So, you have to decide if you’re going to be able to pay EVERY month on time or not. If you think you might be late (even by 1 day) on a payment over the next 20 years, then use Bank of America or Nelnet.
Only about 18% of students eligible for the rate reduction after a certain amount of payments actually get them, since most people pay at least one month over 10 years late.
Citibank has the most money-saving benefits for you, IF you pay on time EVERY time. And I do mean ON TIME!!! You can’t be even a day late with your payments or the benefit is lost.
So, if you can sign up for automatic payments and pay every single payment ontime, go with Citibank. If not, do Bank of America.
Also, if you’re going to take out different loans each year, stick with the same lender. If you have multiple lenders you’ll have multiple payments to different lenders, which means you’ll probably consolidate and that means that all these benefits you’re considering will be lost.
If you are planning to consolidate your loans (put them all into one loan payment instead of 2 or 3), then go with Bank of America, since they have no fees… better for you!!!
Hope that helps!