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Author Topic: quick private loan question  (Read 1567 times)

Fred Hits

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quick private loan question
« on: June 13, 2005, 10:19:20 PM »
is there anything wrong with applying for 2 places instead of one?  im not sure whether access or northstar will give me the best rate so i wanna try both. thanks

kernelgt

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Re: quick private loan question
« Reply #1 on: June 14, 2005, 03:19:40 AM »
shop and compare before you buy.   Nothing wrong with it at all...call away!

Freznic

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Re: quick private loan question
« Reply #2 on: June 14, 2005, 08:40:01 AM »
The only problem - which you probably already know anyway - is that it may affect your credit, because every time someone requests a credit report (which happens each time you apply for a loan) it shows up on your credit report. Schools have advised me to apply to one lender at a time, because otherwise it may look like I'm too hungry for credit.

From:  http://money.cnn.com/2005/03/16/pf/debt/creditscore/

"Myth: Shopping around for a loan hurts your score. When you apply for a loan or get pre-approved the creditor checks your credit report, which shows up as an inquiry to your credit. While it's true that too many inquiries to your credit will lower your score, you absolutely can shop around for a mortgage, home equity loan or car loan without worrying about damaging your credit, said Sjoblad. "As long as the same kind of inquiries are made within 14 days of each other, they count as one inquiry on your credit score," he said. Take note: This grace period doesn't apply to credit cards."

Heel

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Re: quick private loan question
« Reply #3 on: June 14, 2005, 09:30:36 AM »
The only problem - which you probably already know anyway - is that it may affect your credit, because every time someone requests a credit report (which happens each time you apply for a loan) it shows up on your credit report. Schools have advised me to apply to one lender at a time, because otherwise it may look like I'm too hungry for credit.

From:  http://money.cnn.com/2005/03/16/pf/debt/creditscore/

"Myth: Shopping around for a loan hurts your score. When you apply for a loan or get pre-approved the creditor checks your credit report, which shows up as an inquiry to your credit. While it's true that too many inquiries to your credit will lower your score, you absolutely can shop around for a mortgage, home equity loan or car loan without worrying about damaging your credit, said Sjoblad. "As long as the same kind of inquiries are made within 14 days of each other, they count as one inquiry on your credit score," he said. Take note: This grace period doesn't apply to credit cards."

I'm glad someone finally posted that.  I just applied for a mortgage this weekend and when I mentioned to my lender that I was shopping rates for student loans she said that this is a popular misconception.

According to her the only thing that would effect your actual score would be if you applied for and accepted a loan or line of credit.  Multiple inquiries made while shopping rates did nothing to hurt my ability to borrow for a home.

Additionally, in shopping for a home loan I was quoted rates a full half point apart by the first two lenders I spoke with. Shopping rates is imperative as you don't know for sure what each company is basing their lending decisions on.  For example, in borrowing for a home lenders use your mid-FICO score (literally they take the middle score of the three).  I've heard that this is not necessaryily the case for student loans.  They may choose only to look at one credit report, or even worse, may base their decisions about rates on the lower of the three.

Bottom line:  shop, shop, shop.  If you're worried about inquiries hurting you simply explain to the lenders that you've been shopping rates and that you haven't opened any new lines of credit.

Boston24

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Re: quick private loan question
« Reply #4 on: June 14, 2005, 12:19:48 PM »
NYU said to not apply to multiple lenders because they approve whichever lender authorizes it with the school first, or something like that.  What's this all about?  Do no other schools do this? 
UVa it is!

SleepyGuyYawn

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Re: quick private loan question
« Reply #5 on: June 14, 2005, 01:30:50 PM »
My impression is that:

a) you apply
b) the loan company offers terms and a rate
c) you accept the terms/rates by signing something
d) the loan company negotiates with your law school on when to dispurse what funds

am i wrong?

desmo

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Re: quick private loan question
« Reply #6 on: June 14, 2005, 02:01:33 PM »
My impression is that:

a) you apply
b) the loan company offers terms and a rate
c) you accept the terms/rates by signing something
d) the loan company negotiates with your law school on when to dispurse what funds

am i wrong?

I applied several places, stalled on signing the promissary note at all but one.  Signed the note and had the check in 2 days, no negotiation with the law school on timing.  Since school came through with greater aid than expected, I plan on cancelling this loan and sending back the check.

LawLoans from SallieMae waited on info from the school before confirming how much they would lend - cancelled this one before they ever got it.  Access Group and Chela both went through credit check and approved amount requested.

So I had something like 4-5 applications going at once in addition to the Stafford / Perkins loan.  I panicked a little since it's mid June already and I had no clue how I was going to pay for school.  After dealing with my wife's loans, I was too nervous to wait until after class started to get the financial aid finalized.

SleepyGuyYawn

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Re: quick private loan question
« Reply #7 on: June 14, 2005, 02:06:54 PM »
Interesting.  Yea, it's been hard for me to get a sense of when exactly I should apply.  I'd like to wait until late June or early-July (because then I'll have credit cards mostly paid off), but I don't want to get my financial aid check in October either...

Out of curiosity, what was the company that didn't check with the school?  I'm not sure if that is a good thing or a bad thing, but it's interesting.

desmo

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Re: quick private loan question
« Reply #8 on: June 14, 2005, 02:37:07 PM »
Interesting.  Yea, it's been hard for me to get a sense of when exactly I should apply.  I'd like to wait until late June or early-July (because then I'll have credit cards mostly paid off), but I don't want to get my financial aid check in October either...

Out of curiosity, what was the company that didn't check with the school?  I'm not sure if that is a good thing or a bad thing, but it's interesting.

GMAC

I think BankOne operates the same way.  Interest rates are higher and GMAC dinged me for a fairly big 'origination fee' - like legalized loan sharking...

SleepyGuyYawn

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Re: quick private loan question
« Reply #9 on: June 14, 2005, 02:53:20 PM »
Interesting.  I wouldn't have even though to go to GMAC for a loan.

Well, I'm pretty sure I'm going to go with Sallie Mae or Access.