Sallie Mae Vs Discover Student Loans

Sallie Mae Vs Discover Student Loans

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Sallie Mae Vs Discover Student Loans

Discover Student Loan Balance

Discover student loans have been around since 1989, however they were only federally regulated in 2010. In 2007 Sallie Mae was purchased by private equity firm Cerberus Capital Management. In 2012, Discover Financial Services bought Sallie Mae for $13 billion. Since then Sallie Mae has had its ups and downs, but is still in business today.

Sallie Mae vs. Discover Student Loans

When comparing Sallie Mae to Discover Student Loans, you are getting two different products. While both offer the same basic services, they serve their customers differently. Most people who use Sallie Mae’s services are under the impression that they are a direct lender. However, Discover Student Loans actually works as an indirect lender. So if Sallie Mae goes out of business, then students could potentially lose access to credit. Students using Discover Student Loans have much more control over how their loan money is spent.

Student Loan Debt Statistics

In 2014 total student loan debt reached $1.3 trillion. That’s an increase of about 5 percent from 2013. In 2015, 44.9 million Americans held some type of student loan debt. Of those, about 32.8 million owed money to federal financial institutions and 11.1 million owed money to banks.

Sallie Mae Bankruptcy

Sallie Mae filed for bankruptcy in May 2011. At the time, the company reported $16.6 billion in assets and $18.7 billion in liabilities. According to the court documents, the company said a major factor behind the filing was “the significant decline in the value of collateralized variable-rate demand notes issued by the Company.” The company also cited the declining value of mortgages and securities backed by mortgage pools as a contributing factor. Sallie Mae said these factors resulted in lower funding fees, which in turn reduced revenue and profits. It also stated that the decrease in revenues caused it to fall short of meeting interest payments on certain types of debt.

Sallie Mae Lenders

Sallie Mae offers several types of lenders for its customers including banks, credit unions, and other financial institutions. There are three different levels for each type of lender. The first level provides the lowest rates. The second level comes at a slightly higher rate. And finally, the third level is considered the best option. Each level has specific requirements that need to be met. For example, a bank would require you to meet minimum income, good payment history, and low delinquency ratio. Credit unions would require you to be a member and meet a few additional requirements. A commercial bank might not even accept you unless you have excellent credit.

How Interest Rates Work

Interest rates work similarly no matter what kind of lender you choose. Every month, your lender will send you a bill showing how much interest you owe. Your lender may charge either fixed or adjustable interest rates. If you don’t pay off your balance before the end of the year, you will likely get hit with a late fee. These fees are charged monthly and vary depending on your situation. To avoid incurring these fees, you should always try to make sure you pay off your account in full each month.

What You Need to Apply for a Student Loan

If you decide to take out a college loan, you’ll need to complete a FAFSA. This is the Free Application for Federal Student Aid. You can apply online or download the paper version and mail it to the government. Once you’re approved, you’ll receive a notification telling you where and when you can pick up your check. When picking up your check, be prepared to show documentation that proves you are enrolled at least half time and that you plan to attend school at least six quarters long.

Sallie Mae Vs Discover Student Loans

Sallie Mae vs Discover Student Loans

There’s no denying that student loans have gone out of control. Over the past few years, interest rates have been increasing at an alarming rate. This means that if you don’t pay off your loan faster, that the interest will add up. If you’re still paying back old loans, you may be wondering where the money comes from to pay for current expenses. In this video we compare two popular types of student loans. Keep reading to find out if Sallie Mae or Discover Student Loans are right for you!


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Sallie Mae Vs Discover Student Loans

1 : Sallie Mae is not the only loan company out there. To prove this I want to show you what my experience was with both of them. (and I hope they don’t mind me sharing this)

I took out student loans in 2011 to help fund my schooling at UCLA. I had been accepted into the music program but didn’t have enough money to pay for school. So I went to Sallie Mae and applied for two loans – one for $15k for general use and one for $13k for tuition purposes. A few days later I got a call asking if I could go to their website and fill out some paperwork (this was before the 1 thing). After filling out the forms online I decided to go to their office to sign everything. When I arrived at their office, I was greeted by a nice young man who gave me a quick tour of the place. He asked where I had been accepted and how much money I wanted to borrow (which I knew beforehand). Then he said I should just wait here while he checked something online. He came back about 5 minutes later and told me I would need to submit 2 weeks worth of bank statements and then I would get a letter telling me whether I won or lost the lottery. He then asked me if I was going to live off campus, and I told him no I lived in Westwood. He gave me a folder full of papers and told me that I could take those home and read them over the weekend. He mentioned that I should make sure to put my name down on the front page of every document. Then he told me that I would hear from Sallie Mae in about 4-5 business days.

A week later I received a letter in the mail saying that there was a problem with my application and that I might lose my scholarship. I called Sallie Mae immediately and spoke with someone named John. He told me that my credit wasn’t good enough, and that I’d need to start paying interest on my loans right away. He said that I would need to come to his office to sign a contract. At first I thought that maybe I misunderstood what he meant by “start paying interest,” but after thinking about it more, I realized that he meant that I would have to pay back the entire amount of money that I borrowed. I called Sallies again, and they gave me the same advice.

At this point I started to feel really depressed. I felt like I had wasted my time, effort, and money on a company that wouldn’t even give me any information. So I looked around at the other options. One was Bank of America, and I actually had a relationship with one of their employees. So I called her and she said she’d look into things for me! She called me a few hours later and told me that I couldn’t have the loans unless I was enrolled in school. She also mentioned that I could apply for scholarships and grants. She told me that I shouldn’t worry because I would get money back once I graduated.

The second option was Discover Student Loans. I had heard about these kinds of loans years ago, but never seen anyone use them. So I called them, and they were extremely helpful. They told me that they would let me know within 24 hours if I got approved.

So the next day I filled out a packet of documents and sent them in. In less than 2 days I got a phone call telling me that I had gotten approved. I signed a contract and paid the initial interest amount. Then I waited for the rest of the money. I would receive about $2500 per month PLUS a 10% discount on future payments.

They also told me that I could defer payment for 3 years and that I would only have to begin repaying the loans once I graduate. They told me that my monthly payments would be lower, and that I would have access to special terms if I chose to pay back the loans early.

Overall I think that Discover Student Loans was a lot better the the Sallie Mae loan. Their customer service reps were great, and they were fast with their responses. Also their terms were definitely better than Sallie Mae’s. If you’re looking for student loans check them out!

Sallie Mae Vs Discover Student Loans

The amount of money I owe at SallieMae vs my total debt combined

How much interest does Sallie Mae charge? (0% APR)

What kind of security do they offer? (none – only federal loan guidelines)

Does SallieMae allow me to refinance my loans? (Yes)

What options do I have if I want to pay less than my minimum payment? (Pay off entire balance)

Do I have access to a grace period where I don’t have to make payments for a specified time? (yes)

If any of my schools close down, do I lose my student loans? (no)

If I’m not enrolled in school full-time, can I still afford to live while paying off my loans? (yes)

Can I get a job without taking out a private loan? (Yes)

What is the average monthly payment for undergraduate students? ( $250.00 per month )

Does Sallie Mae require credit checks? (no)

Will it affect my credit score if I use my student loan to buy a car? (No, it won’t hurt your credit)

Are there other ways to help alleviate financial strain? (Yes)

How does Sallie Mae calculate its annual percentage rate (APR)? (It varies depending on your loan type; however, it’s 0%)

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