US Private Student Loan Options

[keith_015]

OK, so this morning I did some research on US borrowing options. Of note, all options require a US citizen or PR to cosign. There are three options of which I called and here are the findings:

 

Sallie Mae - Smart Option Student Loan

 

How much can be borrowed?: The amount can be up to the cost of attendance outlined by your school with no cap. So if you look on your school's website for the estimated cost of attendance, that is the max which you can get, which is nice as it includes everything including living.

 

What are the interest rates?: The interest rate is based on LIBOR (currently 0.25%) added on to anywhere between 4-12.5%. The rate will be based on cosigner credit.

 

Repayment terms: must repay interest while in school. 6 month separation period in which only interest has to be paid.

 

Any other fees?: There is a disbursement fee that might have to be paid every year ranging from 0-3%

 

Processing times: For overnight mail - 4 days. For regular mail - 10 days.

 

Chase Select - Graduate Health Professions Loan

 

How much can be borrowed?: The amount can be up to the cost of attendance outlined by your school with an aggregate (cumulative) cap of $250k.

 

What are the interest rates?: The interest rate is based on LIBOR (currently 0.25%) added on to anywhere between 3.95-12.55%. The rate will be based on cosigner credit. 0.25% interest reduction if monthly payments get auto-deducted from a bank account.

 

Repayment terms: 3 options:

1) Defer principle + interest: Make no payments while continuously enrolled in school or in a health professions residency. Repayment of principal and interest then begins 180 days after graduation or when you are no longer enrolled in school for undergraduate, graduate, and graduate health professions loans. If the student begins a medical residency during the deferment period, then the customer can request that the deferment end date be extended nine months after the residency

2) Interest only: Repay only your interest while continuously enrolled in school or in a health professions residency. Repayment of interest begins 15 to 45 days after the final loan disbursement. Repayment of principal begins six months after graduation or when you are no longer enrolled in school, or nine months after a health professions residency is completed.

3) Intermediate repayment of principle + interest: Repay principal and interest in a fixed monthly amount beginning 15 to 45 days after the final disbursement date.

 

Any other fees?: NO

 

Processing times: A few weeks

 

Wells Fargo - MedCAP Alternative Student Loan for Health Professionals

 

How much can be borrowed?: For international students (temporary aliens) the amount is capped at $35k/year.

 

What are the interest rates?: Is based on the prime rate index + 1.5-4%. Currently, the prime rate is 3.25%. 0.25% interest reduction if monthly payments get auto-deducted from a bank account. 0.5% interest reduction upon verification of graduation.

 

Repayment terms: Begins up to 7 years after first disbursement. That means you do not have to pay interest while in school.

 

Any other fees?: NO

 

Processing times: 3-4 weeks

 

 

 

Bottom line, Sallie and Chase are pretty much the same in terms of interest. Sallie of course will give you more total having no ceiling. Chase is nice for permitting deferral of all payments, and having interest rate reduction for auto-withdrawal.

 

My favourite option of the three was Wells Fargo. It is too bad they cap the amount at $35k/year for internationals yet open it wide up for everyone else. They have the advantage of having deferred payments as well, as well as a bonus for auto-withdrawal AND graduation. As well, even if you have a lousy cosigner, your interest rate now would be 7.25% and if the prime rallies back up to 5, then the interest rate would still only be 9%. For the other two, if LIBOR goes back up to around 2, that could mean around 14% with a terrible cosigner.

 

For those who are interested in the deferred payment schema, the way it works (from what I understood) is that the interest gets pegged onto the principle at the end of the year, but you do not pay interest on it YET. Once you hit repayment, the interest becomes part of the principle and THEN you would be paying interest on interest.

 

For long term payment timelines (ie in terms of years) I didn't look into that yet. That is a bridge to cross a little bit later.

[c17h]

Thanks SO much for this information!! It really helps.

[trickybox]

yeah this really helps to narrow down my research on this too. are you guys planning to apply for osap too?

[c17h]

yeah this really helps to narrow down my research on this too. are you guys planning to apply for osap too?

 

Yes, I finally looked into OSAP, and Canadians can get 5 to 10K each year while attending medical school in the US. So I guess OSAP is a good place to get started and then LOCs from banks.

 

Are you guys planning to apply OSAP and LOCs as well? Any other sources that we should be aware of (other than individual school's financial aid or scholarships)?

[keith_015]

Thanks SO much for this information!! It really helps.

 

No problem c17h. Hope this will help out. Something I did forget to mention is that you should probably apply no earlier than the summer. This is because if you do too early, the cosigner's credit check will expire. Another thing is that everything is needs based according to the school. This means that even though you think you want $15k, and the school says you need $10k, ultimately, only $10k will be authorized.

 

One extra item about Wells Fargo which I forgot to mention was somehow the credit for the school plays into the interest rate too. I'm not sure how that is supposed to work, but that is what I was told. I'm sure it won't be too much of a factor either.

 

From what I gather from the agents I spoke to and from the fin. aid leaflets schools have distributed, there is a very high degree of interaction with the school's fin. aid dep't, much unlike the minimal experience I have had with MB student loans.

 

I'm working on finding out all the Cdn options. I have spoken with National Bank and RBC so far. I will try talking with a few more Tues (TD, Scotia, CIBC) and will make a new thread then. One bank I never heard anybody approach is HSBC. They mention that they have student LOC's, but don't specify if they have professional LOC's. Might be one to look into as well.

 

Oh, and I am still looking for more US options as well. I will get in touch with Citibank and PNC (which say on their website that they will accept int'ls), as well as maybe see if RBC (USA) has anything.

[Dr.Henderson]

Wow this is an incredible thread, should be a sticky!

 

Thanks Keith!

[keith_015]

UPDATED

 

Of note, all options require a US citizen or PR to cosign.

 

 

Sallie Mae (Fifth Third Bank) - Smart Option Student Loan

 

How much can be borrowed?: The amount can be up to the cost of attendance outlined by your school with no cap. So if you look on your school's website for the estimated cost of attendance, that is the max which you can get, which is nice as it includes everything including living.

 

What are the interest rates?: The interest rate is based on LIBOR (currently 0.25%) added on to anywhere between 4-12.5%. The rate will be based on cosigner credit.

 

Repayment terms: must repay interest while in school. 6 month separation period in which only interest has to be paid.

 

Any other fees?: There is a disbursement fee that might have to be paid every year ranging from 0-3%

 

Processing times: For overnight mail - 4 days. For regular mail - 10 days.

 

Chase Select - Graduate Health Professions Loan

 

How much can be borrowed?: The amount can be up to the cost of attendance outlined by your school with an aggregate (cumulative) cap of $250k.

 

What are the interest rates?: The interest rate is based on LIBOR (currently 0.25%) added on to anywhere between 3.95-12.55%. The rate will be based on cosigner credit. 0.25% interest reduction if monthly payments get auto-deducted from a bank account.

 

Repayment terms: 3 options:

1) Defer principle + interest: Make no payments while continuously enrolled in school or in a health professions residency. Repayment of principal and interest then begins 180 days after graduation or when you are no longer enrolled in school for undergraduate, graduate, and graduate health professions loans. If the student begins a medical residency during the deferment period, then the customer can request that the deferment end date be extended nine months after the residency

2) Interest only: Repay only your interest while continuously enrolled in school or in a health professions residency. Repayment of interest begins 15 to 45 days after the final loan disbursement. Repayment of principal begins six months after graduation or when you are no longer enrolled in school, or nine months after a health professions residency is completed.

3) Intermediate repayment of principle + interest: Repay principal and interest in a fixed monthly amount beginning 15 to 45 days after the final disbursement date.

 

Any other fees?: NO

 

Processing times: A few weeks

 

Wells Fargo (Wachovia) - MedCAP Alternative Student Loan for Health Professionals

 

How much can be borrowed?: For international students (temporary aliens) the amount is capped at $35k/year.

 

What are the interest rates?: Is based on the prime rate index + 1.5-4%. Currently, the prime rate is 3.25%. 0.25% interest reduction if monthly payments get auto-deducted from a bank account. 0.5% interest reduction upon verification of graduation.

 

Repayment terms: Begins up to 7 years after first disbursement. That means you do not have to pay interest while in school.

 

Any other fees?: NO

 

Processing times: 3-4 weeks

 

Citibank - CitiAssist Health Professions

 

How much can be borrowed?: The amount can be up to the cost of attendance outlined by your school with an aggregate (cumulative) cap of $275k.

 

What are the interest rates?: Uncertain on this one. There are no published ranges. Totally determined on the co-signers credit. Based on amount plus 3 month LIBOR (which is slightly higher than regular LIBOR). Agent said interest rates are approx around 6-11.5%, however their examples show a hypothetical around 5%. 0.25% interest reduction if monthly payments get auto-deducted from a bank account. Although it wasn't published on the website, I was told there is 1% reduction in interest with 36 consecutive good payments.

 

Repayment terms: Can defer all costs to the end. Have 9 month grace period after residency, plus the option to delay paying principal for 24 or 48 months after the grace period. Payments can also be made while in school. Have up to 25 years to repay.

 

Any other fees?: There is a disbursement fee that might have to be paid every year ranging from 0-3%

 

Processing times: Couple weeks

 

Bottom line, Sallie and Chase are pretty much the same in terms of interest. Sallie of course will give you more total having no ceiling. Chase is nice for permitting deferral of all payments, and having interest rate reduction for auto-withdrawal.

 

My favourite option of the three was Wells Fargo. It is too bad they cap the amount at $35k/year for internationals yet open it wide up for everyone else. They have the advantage of having deferred payments as well, as well as a bonus for auto-withdrawal AND graduation. As well, even if you have a lousy cosigner, your interest rate now would be 7.25% and if the prime rallies back up to 5, then the interest rate would still only be 9%. For the other two, if LIBOR goes back up to around 2, that could mean around 14% with a terrible cosigner.

 

For Citi, it seems similar to Chase. I wasn't wowed by anything other than the potential repayment scheme. I'm just worried about the interest rate you would be expected to pay. Not having it set in stone is a concern.

 

For those who are interested in the deferred payment schema, the way it works is that the interest gets pegged onto the principle at the end of the year, but you do not pay interest on it YET. Once you hit repayment, the interest becomes part of the principle (called one time capitalization) and THEN you would be paying interest on interest.

 

I called PNC and they are a no go for int'ls. The only one left to maybe find out about is Discover Student Loans. Nobody answered the phone though .

 

EDIT: YES this should be stickied. But I doubt any moderators actually check over the threads here. If somebody knows a mod, bring it to their attention.

[UserName]

Hey Keith do you know if this can apply to us Canadians wanting to study OUTSIDE the US (Carib, ireland, Aussie) but who also have American co-signers?

 

thanks for the great post!

[keith_015]

Hey Keith do you know if this can apply to us Canadians wanting to study OUTSIDE the US (Carib, ireland, Aussie) but who also have American co-signers?

 

thanks for the great post!

 

NO. That would only work if you were a US citizen going to school outside the US. Non-US citizens attending Non-US schools do not qualify. If you are interested in those countries, see what their banks offer. They probably will require a cosigner from that country though, especially in this day and age of credit.

[UserName]

thanks!

[Vincent Freeman]

Thank you Keith your research will definitely make things easier for me. I also get into American Schools and will research my options very carefully.

 

cheers,

[bmelover]

Is it just me or does it seem like here is a HUGE disparity in interest rate between US and Canadian Loans? Am I missing something?

[twinklystar_hp]

bump.

 

i heard somewhere that for salli mae, the cosigner's name comes off the loan after an year...??

[keith_015]

I would doubt it because as an international, securing that much debt with no previous US credit history is far too risky to give up on a co-signer after one year. I could be wrong, but if that is a route you are interested in, give them a call. They were more than willing to give whatever info you needed on the phone.

[relaxer12]

Yes, I finally looked into OSAP, and Canadians can get 5 to 10K each year while attending medical school in the US. So I guess OSAP is a good place to get started and then LOCs from banks.

 

Are you guys planning to apply OSAP and LOCs as well? Any other sources that we should be aware of (other than individual school's financial aid or scholarships)?

 

Wow I didn't know we can get OSAP for US med schools!

 

Do you know where to start to apply for it? It lists contact info on the OSAP website but doesn't really show where to start...