The Educated Borrower Frequently Asked Questions
The Educated Borrower Frequently Asked Questions
What makes The Educated Borrower different?
- Our process is as fast as it is simple. Unlike Federal loan programs, we keep paperwork and processes to a minimum. We know from listening to parents and recent graduates how time consuming the loan process is and how inadequate today’s resources are to meet the average student’s needs. More importantly, we’re doing something about it.
Can students take out their own loans?
- Students can apply without a co-signer if they meet all three of these requirements:
- Student has proof of income for the last two years and this source of income is expected to continue while the student is in-school (e.g. copy of recent pay-stub dated within 45 days or if self-employed, two most recent tax returns including all relevant schedules with copy of W-2 and 1099s).
- Student must be a U.S. citizen or permanent resident of the United States for the previous two years.
- Student has two years of credit experience that meets underwriting requirements.
Students who can’t meet these three requirements may simply apply with an eligible co-signer.
How does a borrower become eligible for an Educated Borrower Loan?
- The student borrower must (1) provide proof of enrollment in an Educated Borrower-approved school (e.g. school transcript, tuition invoice, acceptance letter, semester/terms schedule, or enrollment confirmation on school letterhead) and (2) (a) either be a U.S. citizen or permanent resident for the previous two years, or (b) have a co-signer who is a U.S. citizen or permanent resident for the previous two years. The co-signer will also need to show proof of income for the last two years (e.g. copy of recent pay-stub dated within 45 days or if self-employed, two most recent tax returns including all relevant schedules with copy of W-2 and 1099s), but the important thing to note is that, unlike Federal loan programs, there are no preset limits on maximum income.
You mean the borrower won’t be disqualified if he or she makes too much money?”
- Exactly. An Educated Borrower Loan is not based on income bracket—which means we’ll never dismiss an application because the borrower or co-signer makes more than a certain amount. Every family has different needs and we help them plan accordingly.
Does the student have to attend school on at least a half-time basis to be eligible for The Educated Borrower Loan?
- Not at all. If you are a student borrower attending school less than half time, our Educated Borrower Continuing Education Loan has been designed especially for you. Our other program offerings are specifically designed for students attending school at least half-time, as determined by the school.
What if my school is not on the Educated Borrower list of approved schools?
- We’ve already approved more than 25,000 schools for participation in our programs and we’re always looking to broaden our market. If your school is not listed, please contact us by phone at 888.587.8178, and provide your school’s name, address, phone number and a contact name, if possible. We will then contact the school to obtain the necessary information and then get back to you with the result.
What is acceptable documentation for proof of enrollment?
- Proof of enrollment at an Educated Borrower-approved school must be provided before the loan can be finally approved. Acceptable proof of enrollment includes:
- A copy of the registration schedule from the school printed on school letterhead, OR
- A copy of the tuition invoice from the school, OR
- A copy of the acceptance letter from the school verifying enrollment, OR
- A copy of a financial aid award letter.
What is acceptable documentation for proof of income?
- Proof of income must be provided before the loan can be finally approved. If applying with a co-signer, the co-signer must also provide this information. Acceptable proof of income documentation includes:
- A copy of a recent pay stub (no more than 45 days old) providing the name and address of the employer as well as the year-to-date earnings (if your income is from another source, provide appropriate IRS documentation; if you have any questions, please contact us), OR
- A letter from the employer on company letterhead which includes the hiring date, the status (full time or part time) hours worked and salary information, OR
- For self-employed individuals, two most recent tax returns including all relevant schedules with copy of W-2 and 1099s, OR
- If you’ve retired, 1099 forms for the last two years.
Will I find The Educated Borrower Loan I need?
- Whatever education phase you or your child is in, an Educated Borrower Loan can work for you. We offer customized loans for elementary and secondary education in our K-12 program, undergraduate and degreed undergraduate studies, graduate work, as well as loans for health professionals and continuing education.
Okay, how much money can I borrow?
- Depending on the type of loan and your creditworthiness, you’ll be eligible to borrow anywhere from $1,000 to $60,000 per year and up to $240,000 in total (to see a comparison of our loan amounts, please click here).
I’m only interested in a private elementary and secondary school for my child right now. Could you elaborate?
- You can qualify for up to $20,000 per year for each child attending a private school in grades K through 12. When your child is ready for college, loan restructuring options may be available for your child’s continuing education.
What expenses can The Educated Borrower Loan be used for?
- The Educated Borrower Loan can be used for education related expenses such as tuition and fees, room and board, books and supplies, transportation and living expenses. All the necessities, so you and your child can concentrate on what’s really important—an education.
How long do I have to pay off the loan?
- You’ll have up to a 20-year repayment plan that is designed to minimize your monthly payments (to see a comparison of our loan terms, please click here).
Is the interest on student loans tax-deductible?
- You’ll be happy to know that in many cases it is, depending on your income and other factors. Please check with your tax advisor for details.
Do you have a deferred payment plan?
- Glad you asked, because we’ve built that into our programs. With the exception of The Educated Borrower Elementary & Secondary Loan, which provides for repayment beginning approximately 45-60 days after disbursement, and The Educated Borrower Continuing Education Loan, which provides for repayment 30 days after the study program ends, withdrawal from school or in 25 months, whichever is sooner, all other Educated Borrower Loan programs enable you to wait up to six months after graduation or separation from school to make a payment.
Is there a penalty if I pay the loan off early?
- Impressive feats like that never incur any prepayment penalties with The Educated Borrower Loan.
How is the interest calculated on an Educated Borrower Loan?
- The Educated Borrower Loans have variable interest rates that are adjusted quarterly based on the 1-month London Interbank Offered Rate (LIBOR) index (as published by the British Bankers’ Association) plus a margin of between 3.00% and 5.50% depending upon your individual credit or the credit of a co-signer. To review a sample repayment example, please select one of the loans below:
How many disbursements are made for the Educated Borrower Loan?
- Just One. A disbursement check is mailed directly to the borrower so that you can take care of your education expenses immediately and focus on the important stuff—school! If approved with a co-signer, loan proceeds will be disbursed co-payable to both borrower and co-signer.
Is direct debit from a bank account a good way to repay your loan?
- It’s an excellent way and will result in an interest rate reduction of one quarter of one percent.
I’m not a U.S. Citizen but am attending school here. Can I apply for the Educated Borrower Loan?
- Yes, but you must apply with an eligible co-signer who is a U.S. Citizen or permanent resident of the United States for the previous two years.
How can I apply for an Educated Borrower Loan?
- You can apply by calling a loan specialist during office hours, or by going online to complete and print your application right here. You will need to submit your signed application and supporting documentation by fax or mail.
What do I need to be ready to apply? Should I plan ahead?
- Now you’re thinking. When you apply online or call, please have the following information ready: For borrower and co-signer: name, SSN, date of birth, permanent home address, years at that address, employer name and salary. We’ll also ask you if you or the co-signer have ever declared bankruptcy or defaulted on a student loan.As part of the application process, you’ll also need to send us the following documents:o Signed and Completed Application (pages 1, 2 and 3)
o Enrollment Verification (e.g. school transcript, tuition invoice, acceptance letter, semester/terms schedule, or enrollment confirmation on school letterhead)
o Income Verification for borrower or, if applying with a co-signer, for co-signer (e.g. copy of recent pay-stub dated within 45 days or if self-employed, two most recent tax returns including all relevant schedules with copy of W-2 and 1099s).
o Address Verification (e.g. copy of most recent utility bill dated within 45 days and government issued photo identification) for borrower. If applying with a co-signer, for borrower and co-signer (e.g. copy of most recent utility bill dated within 45 days for co-signer and copy of government issued photo identification for borrower).It’s really quite easy when you get right down to it.
How long is the approval process?
- Online, you can generally get conditional pre- approval in 15 minutes or less. No kidding. It’s the fastest way to complete the entire process and get your loan check.
Simply apply here or call our toll free number 888.842.4353 and remember these four easy steps:- Complete all required application fields;
- Download a pre-filled promissory note that has captured all your application entries;
- Make sure that you and your co-signer, if applicable, sign the promissory note; and
- Gather your signed promissory note, proof of income and proof of enrollment andmail to:
300S Duncan Ave,Suite 260
Clearwater, FL 33755or fax to: 727.443.7880
When can I get started?
- What are you waiting for? Click here to begin your application process right now!
Why Should I consider The Educated Borrower Private Consolidation Loan when there are so many other offerings out there?
- The Educated Borrower Private Consolidation Loan has been designed to help you effectively manage your monthly payments following graduation. We have designed a program that recognizes the difficulty many students have managing their monthly debt obligation during the first few years after graduation, and have found a way to provide some budget friendly options. We believe that students need to recognize the importance of maintaining a good credit history, and by providing the opportunity to have lower monthly payments they can also afford other expenses associated with starting a career and moving into the “real world”.
How does this work?
- It’s pretty simple actually:
- We offer a reduced interest rate in the first year which is between 3.65% and 4.00% less than your full loan interest rate (between 9.89% and 11.08% APR).* This means that your loan is accruing interest at a lower rate, giving you a breather while you get yourself established.
- We allow you to make interest-only payments for the first two years of repayment. By paying the interest, you are keeping up with the accrued value of the loan, but lessening your monthly payment burden in those lean early years.
- We have extended the maximum loan term to 30 years (most student loan terms are 20 years). This in itself lowers the monthly payment. And since there’s no penalty for repayment, you can pay your loan off earlier in future years if you are able. The choice is yours!
- If you make your first 48 monthly payments on-time, you may be eligible for a reduction in your principal balance of between 1.00% and 1.50%.
*Make on-time payments in the first year.
What is the interest rate on my loan after the first year?
- On the first anniversary of your loan closing, the interest rate on your loan changes to LIBOR plus 5.00% to 5.75%, depending on your credit history or that of your co-signer, if you have one.
Did you say I can make interest-only payments in my second year as well?
- During this second year, you are still eligible to make interest-only monthly payment, which should fit nicely with your lifestyle. It is only on the second anniversary of the loan closing that you will be required to make principal and interest payments.
Can I consolidate my Federal Student Loans together with my private student loans?
- No, Federal Student Loans are subject to unique terms and conditions and may not be combined with The Educated Borrower Private Consolidation Loan. We recommend that you take advantage of a separate federal consolidation loan product for these loans.
Which types of loans are eligible to be consolidated in the Educated Borrower Private Consolidation Loan?
- Any existing nationally-marketed private student loan is eligible for the Educated Borrower Private Consolidation Loan. Federal student loans, home equity loans and credit card obligations are not eligible for consolidation. If you are unsure whether a loan may be eligible please call our customer support center at 888.587.8178.
What information will I need to complete the application form?
- You will need to have the following information available for you and your co-signer (if applicable)
- Name address and social security number
- Names, addresses and telephone number of two personal references
- Monthly housing expense information
- Monthly Income and expense information
- Estimate Loan Amount for Loan Consolidation
- For Each of the loans to be consolidated:
- Loan Account Number
- Name and address of loan servicer (on your monthly billing statement)
- Outstanding loan balance/expected payoff amount
Do I need to fill out a FAFSA?
- No, that is not necessary. The Free Application for Federal Student Aid (FAFSA) is associated with Federal Student Loan Programs. The Educated Borrower Private Consolidation Loan is for non-Federal student loans.
Is a co-signer required?
- No, a co-signer is not required, but applicants who do not meet the credit eligibility requirements on their own may apply with a co-signer. The Educated Borrower Private Consolidation Loan Program offers a co-signer release benefit. If you make 48 on-time payments we will release the co-signer from the debt obligation provided the borrower can meet the credit requirements on their own (at the time of the request to release the co-signer).
Can I consolidate my private loans with those of my spouse so that we have one payment?
- No, Educated Borrower Private Consolidation Loans are limited to private loans associated with one student. However, we would be happy to create a consolidation loan for your spouse as well, which would allow you to make your payments together.
How long will it take for my loan to be consolidated?
- Generally speaking, you should expect the entire private loan consolidation process to be completed in less than 30 days. This is of course dependent upon your ability to provide the required documentation regarding your income, expenses and underlying private student loans.
Can I consolidate my loans and still receive a deferment from making payments?
- No, The Educated Borrower Private Consolidation Loan begins repayment immediately following loan closing and has been designed for students who are either in, or are soon to begin active repayment. If you are still in school, we would caution you to wait until after graduation and when your current deferment has ended. Of course, if you’re in a position to make payments in advance of those two events, we would urge you to begin the process now to simplify repayment and take advantage of our reduced monthly payments.
How many years will I have to repay my loan?
- The Educated Borrower Private Consolidation Loan has been designed with a repayment term of 30 years.
How can I find out how much I owe in current private student loans?
- By reviewing your most recent monthly statement from the student loans servicer(s) who are currently handling your loan(s). In addition, your servicer is likely to provide on-line access to your account balances. Please check your monthly statements online.
Will I get a disbursement check?
- No, The Educated Borrower Private Consolidation Loan will pay off your existing private education loans, allowing you the benefit of making one monthly payment.
How will I know when my Educated Borrower Private Consolidation Loan has been approved and when will my existing loans be paid off?
- Once all required documentation has been received, we will make a loan decision and if approved, we will begin the process of paying off the loans you listed for consolidation. Once completed, we will send you a letter of confirmation.
Is there a minimum loan amount for the Educated Borrower Private Consolidation Loan?
- Yes, the minimum loan amount is $7,500.
Is there a maximum loan amount for the Educated Borrower Private Consolidation Loan?
- Yes, the maximum loan amount is $300,000.
Does my school need to be involved?
- No, school participation is not required.
Should I consolidate my private loans while still in school?
- If you are still in school, we would caution you to wait until after graduation or when your current deferment has ended. Of course, if you’re in a position to make payments in advance of those two events, we would urge you to begin the process now to simplify repayment and pay down your student loans early.
Is the product limited to students who have attended only a limited group of schools?
- The Educated Borrower Private Consolidation Loan has been designed for students who have attended public and private, two and four year schools which are eligible for Title IV loans. We have over 25,000 participating schools, so chances are most recent school of attendance will make you eligible.
Do I have to keep making payments on my existing loans while I’m consolidating ?
- Yes, we recommend that while in the process of applying for The Educated Borrower Private Consolidation Loan that you continue making your on-time monthly payments. This will assure that your credit remains in good standing.
What is the Payoff Authorization Letter ?
- Part of the process of completing your private consolidation loan is to pay off your existing private student loans. The Loan Pay-Off Authorization letter simply gives explicit pay-off instructions to the current holders of your loans to do just that!
Where do I find the Payoff Authorization Letter?
- This letter is attached to your application/promissory note. If you need another copy, it can be downloaded here.
Is the Payoff Authorization Letter required?
- No, we do not require that you complete this form but we strongly suggest that you do. Your completion of this form will likely mean that your Private Loan Consolidation process will be completed more quickly and efficiently.
What do I need to do with the Payoff Authorization Letter?
- It’s really very simple. Just fill in the information requested on the letter, sign it and return it to us with the rest of your required documentation. We’ll do the rest.
Do I need to submit more than one copy of the Payoff Authorization Letter?
- Usually No. If all your private student loans are being serviced by one company then just one signed copy of the Pay-Off Authorization Letter will do.However, if you are making separate payments to different student loan companies, we ask that you complete one pay-off authorization letter for each student loan company. If you’re not sure, please call us at 888.587.7877.
What documentation do I need to provide?
- Signed and Completed Application (pages 1, 2, 3 and 4)
- Income Verification for Borrower or, if applying with Cosigner, for both the Borrower and Cosigner (unless Borrower’s income is not being relied upon to determine repayment ability). This may include a copy of a recent pay stub (within 60 days) or copy of last year’s tax return. If self-employed, please provide copies of two most recent tax returns. If income is from a government program, please provide appropriate Internal Revenue Service (IRS) documentation for the most recent tax year showing such payments or documentation from the government agency making such payments.
- Current Monthly Statement(s) from the underlying lender(s) for each loan listed in Section IV. The documentation needs to list (1) your information, (2) total amount owed, (3) the statement date, and (4) lender or servicer name. Be certain to number documentation to correspond to each loan as listed on Page 3 of the Application.
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Student Loan Consalidation Network One Stop Shop Financial Services
300S Duncan Ave, Suite 260 300S Duncan Ave, Suite 235
Clearwater,FL 33755 Clearwater,FL 33755
support@theslcn.com
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