<p>With second child starting college in the fall, we are looking into private loans to subsidize. We are looking at Wells Fargo, Chase, SallieMae, and one called MyRichUncle.com. Has anyone had a good experience with one of these (or other). I'm assuming the interest rate would be based on one's credit rating?</p>
<p>WOW great topic!!!</p>
<p>I have begun some research so I can share some early findings with you.</p>
<p>Chase couldn't even tell me what the margin over or under (unlikely) the index their rate would be. Chase is indexed to LIBOR (London interbank something or other rate). The people on the phone (and I talked to two of them), couldn't provide even this most basic of info....They were there to solicit loan applications. "You need to apply before we can get you a rate"</p>
<p>It is likely that they have different margin rates based on your credit score, but I thought at least they could give me an idea... ie, if your credit is good it is margin plus 3%, or if poor, it is margin plus 6%.</p>
<p>I next researched CITI whose index is the Prime Rate with a margin of 2.8%.</p>
<p>I looked at Sallie Mae they also used prime rate as the index but seemed to have many offerings depending on credit....They varied from a margin of -1% to +6%. There were also varying levels of loan origination fees, and future rate discounts given for using EFT to pay, and reductions for paying on-time for the first 36 months....or 48 months.</p>
<p>DS college has a preferred lender, and their rates seemed to be very close to Sallie Mae, but there was a mandatory origination fee of 3 or 5 % depending on whether you had a co-signer or not. No discounts once in repayment, or for EFT....HMMM</p>
<p>Here is a link for standard Index rates used by lenders.</p>
<p>I also got some info on B of A from here
<a href="http://www.bankofamerica.com/studentbanking/pdf/Loan_comparison_chart.pdf%5B/url%5D">http://www.bankofamerica.com/studentbanking/pdf/Loan_comparison_chart.pdf</a></p>
<p>which shows a comparison chart. My notes say that B of A uses LIBOR Plus 3.5%, or you could "pay as you go" (not deferred) at</p>
<p>Loan....................Interest Rate<br>
In-school..............LIBOR + 1.00% to 2.75%<br>
In-repayment........LIBOR + 3.00% to 3.90%</p>
<p>(Hope the formatting looks OK).</p>
<p>Hopefully some of the other folks will also chime in. I am working on my typical monster spreadsheet to figure this all out, maybe someone could also give an assist on my question here.</p>
<p>I think that the bottom line for comparisons is really.....APR. I believe that this takes into account origination fees and what not. </p>
<p>Is my thinking flawed???</p>
<p>Keep in mind, every private loan I have lookled at is variable. Beyond strictly the rate, you need to look at what perks they give you for on time or e-payment....</p>
<p>As an example though....for 2 loans that I looked at, there was a difference of 3.8% interest (Sallie Maes best rate vs CITI) so for someone with good credit, the savings can be substantial....</p>
<p>Your results may vary. Hopefully some others will post up what their findings are to provide an assist.</p>
<p>Wow. Thanks for the detailed answer. I will be looking at the info. you provided. I'll post again when I find new info. to share.</p>
<p>I may be able to answer my own question here. It appears as though (at least for one of the loans I looked at) the loan origination fee comes out of the funds up front. That is, apply for $1000 loan with a 3% orig fee, and you actually receive $970....but your outstanding loan principle is $1000. </p>
<p>Just something else to factor in. It looks as though we won't be doing any loans for DS first semester. This is my wife's idea??? I really need to look at the numbers. Just for kicks I may also look at a HELOC or other such loan for the future.</p>