I have a question regarding student loans.

First, a little background:
I shall be attending a foreign medical school in May 2005. I had been pre-approved in the past for a Medacheiver loan from Keybank, but Keybank has pulled out of the foreign market and is no longer processing loans for US students like myself studying abroad. So, I am looking for other options. My school is Teri loan approved, so this is the next option. Staffords are not available at my school.

I have heard that Teri utilizes the Transunion credit bureau reports, so I pulled my Transunion report (couldn't afford all three right now, trying to pay for med school, right), and my TU score is a 687. I have no "baddies", no late payments,except one 30 day, but I am only a card-holder on that account, it is not my account. That's it. I do have $65,000 in undergrad staffords, and $8,500 on a MBNA account that has a $11,500 limit. That is all my debt.

I have access to a cosigner who has a TU credit score of 697, no baddies, but a lot more debt including mortgage and credit cards. I can get as much money as I need "up to cost-of-education" from Teri, but they will require a co-signer no matter what my own credit score is if I want more than $25,000 every two semesters. (Students with adequate credit can get $25,000 on their own signature.) Naturally, medical school will cost more than that.

My questions are:
1. Do you think I should qualify for that $25,000 Teri loan based on my own credit score?
2. Would the co-signer I mentioned help me get the "cost-of-education" loan I mentioned above?
3. Does anyone know of alternative non-Teri loans that I might look into?
4. My undergrad loans are not consolidated. Would consolodating them via Directloan improve my credit score?
Thanks!

Qualifications for alternative loans are closely guarded by the alternative loan lenders themselves. You can try Sallie Mae for a signature loan but I'm not sure that they will lend to a student attending a foreign school. They usually pull EQ and the interest rate you pay is based on your credit even if you have a co-signor with excellent credit.

As far as consolidating your current student loans, it's my experience that there's little if any impact on your score. You may want to consider consolidating before July 1st 2005 to lock in interest rates. I'm sure rates will be on the rise and there is a move in congress to make consolidation loans variable rates instead of fixed.

When you enroll in your new school, get your in-school deferment forms to your prior lenders/guarrantors. Without your deferment info updated, your previous student loans will go into repayment while you are in school.

Thanks for your reply! I always wonder why qualifications for alternative loans are such a guarded secret. You would think that they want more business, and would want to help people improve their credit scores and help folks clean up their act financially. Instead, they seem to be "out to get" people.

snowpuppy -

what is predicted to happen to interest rates after july, 2005? Do you really think people should consolidate now to lock in rates? what things should we be looking out for or considering? - i'm no finance whiz by any stretch of the imagination.

jc

Rates for student loans are tied to the 10 year T-note auction in May of each year. Interest rates have been rising steadily so I see a modest rate increase on July 1st this year.

The bigger issue is that Congress is proposing consolidation loans be changed to a variable interest rate loan. The last info I saw was that the proposed changes were to take place in 2006. Best advice I have is to consolidate before consolidation loans become variable rate.

Snowpuppy -

What do you recommend to someone who will continue to have student loans (one more semester) after July? Do you think its a good idea to consolidate before July regardless?

Also, would you recommend or suggest who to read up on as far as consolidators? Anything would be helpful. I could do a search, but it would be a blind scout-out for info, because I wouldnt have a clue what to be watching for. I appreciate your time and your help.

jc

Wait until you're done with school to consolidate. I don't think the rates will move significantly on July 1st and consolidation is your 'weighted average' of all of your loans.

Shop around with lenders. KeyBank was offering a 5% up front principal reduction on their consolidations. Chase was also offering 5% cash back after 36 months of on time payments. Most student loan lenders have consolidation info posted on their websites. You can also ask your financial aid office if they know of any perks currently being offered to consolidate.

fla-tan

Fla-tan:

What does that translate into, in laymen's terms? Does the above post regarding consolidation later on, when all loans have been taken out, still apply in your opinion? Its like another language to me...

Thanks,

jc