The Guide to Law School Loans

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albusdumbledore
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Re: The Guide to Law School Loans

Postby albusdumbledore » Tue May 08, 2012 9:04 pm

sophistical wrote:Initially I didn't see the harm in applying for as many loans as possible just to see what rates I would qualify for, but I just found out that my credit score will go down by 5 points for every such application.

Just as a side note, this is why when you go to apply for private loans, you should do multiple applications in one day for every lender that you're considering getting a loan at. This way you can compare rates. Credit scorers like Experian and Transunion lump multiple applications on the same day into one hard inquiry on your credit because they assume that you're looking to take out one loan, but are comparing.

sophistical
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Re: The Guide to Law School Loans

Postby sophistical » Tue May 08, 2012 10:36 pm

albusdumbledore wrote:
sophistical wrote:Initially I didn't see the harm in applying for as many loans as possible just to see what rates I would qualify for, but I just found out that my credit score will go down by 5 points for every such application.

Just as a side note, this is why when you go to apply for private loans, you should do multiple applications in one day for every lender that you're considering getting a loan at. This way you can compare rates. Credit scorers like Experian and Transunion lump multiple applications on the same day into one hard inquiry on your credit because they assume that you're looking to take out one loan, but are comparing.


What do you mean "one hard inquiry"? Do you know how much my credit will drop if I submit multiple applications in the same day?

And does it take a face to face meeting or would submitting an online application suffice? I think it would be easier to submit, say, 5 online applications in the same day than to have 5 meetings in the same day.

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albusdumbledore
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Re: The Guide to Law School Loans

Postby albusdumbledore » Tue May 08, 2012 10:46 pm

sophistical wrote:
albusdumbledore wrote:
sophistical wrote:Initially I didn't see the harm in applying for as many loans as possible just to see what rates I would qualify for, but I just found out that my credit score will go down by 5 points for every such application.

Just as a side note, this is why when you go to apply for private loans, you should do multiple applications in one day for every lender that you're considering getting a loan at. This way you can compare rates. Credit scorers like Experian and Transunion lump multiple applications on the same day into one hard inquiry on your credit because they assume that you're looking to take out one loan, but are comparing.


What do you mean "one hard inquiry"? Do you know how much my credit will drop if I submit multiple applications in the same day?

And does it take a face to face meeting or would submitting an online application suffice? I think it would be easier to submit, say, 5 online applications in the same day than to have 5 meetings in the same day.

Read this: http://www.myfico.com/crediteducation/c ... iries.aspx

The short answer to your question is no, your credit score isn't going to drop enough that it really matters. You will easily make that drop up just by paying your loans on time. Online applications would work. And if you read the link, it doesn't actually have to be in the same day. Just in a fairly short time period.

sophistical
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Re: The Guide to Law School Loans

Postby sophistical » Wed May 09, 2012 1:22 am

Thanks albusdumbledore. The link you provided was very helpful. It's certainly more informative than the statement "Each credit inquiry for student loans results in up to a 5-point hit to the borrower's credit score. More than three or four such inquiries are likely to shift the borrower from one credit tier to the next, increasing their costs". I found this at:

http://www.finaid.org/loans/loancomparisonsites.phtml

Based on the new information you posted, it sounds like a borrower should lump all their applications together and pick one as soon as they find one with an interest rate they like.

I guess I'll now wait for Nom Sawyer to help explain the different types of fees.

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Nom Sawyer
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Re: The Guide to Law School Loans

Postby Nom Sawyer » Wed May 09, 2012 5:04 am

sophistical wrote:I just came up with another question: What are all the different types of fees?

I took a look at the list of private lenders here: http://www.finaid.org/loans/privatestudentloans.phtml

For example, some of them claim "No disbursement or repayment fees". This begs the question: These are only the fees they don't charge; what kinds of fees do they charge?

I went through the list and I found the following types of fees. Please correct me if I'm missing any:

1. Disbursement fees
2. Repayment fees
3. Application fees
4. Origination fees
5. Reserve fees
6. Supplemental/cosigner fees (the fee is lower if you have a cosigner)

What exactly are these types of fees? Is finaid.org's claim (on that same page) that "A good rule of thumb is that 3% to 4% in fees is about the same as a 1% higher interest rate" accurate? If so, which of the 6 types of fees (and types I may not have listed) does the rule of thumb apply to?


The rule of thumb isn't really that accurate, but I guess you can use it as a rough estimation. When private loans say there are "no disbursement and repayment fees" then that basically does mean there are almost no fees. Yes sometimes there's a tiny application fee or some other stuff but its not going to be more than a couple hundred dollars and usually there will be no fees at all. My private loan I got said no disbursment/repayment fees and I didn't have to pay any fees for the loan.

The main thing you have to watch for is if there is a fee that is a percentage of your loan. These are the fees that add up (i.e. the GradPlus fee or a Private origination/ disbursement fee for 2-4% of a 25k loan = can be up to a $1000 right at the beginning)..

joedf
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Re: The Guide to Law School Loans

Postby joedf » Wed Dec 05, 2012 2:10 am

Do subsidized Stafford loans still exist (with that limit mentioned in the first post)?

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Nom Sawyer
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Re: The Guide to Law School Loans

Postby Nom Sawyer » Wed Dec 05, 2012 2:35 am

joedf wrote:Do subsidized Stafford loans still exist (with that limit mentioned in the first post)?


Nope, politicians have killed them haha. As a sidenote, the information in here isn't fully accurate anymore since its from 3 full cycles ago. The general gist is still accurate, but the amounts/ numbers might no longer be... I'll try to update it all when I have time to do the necessary research.




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