Managing Your Loan
1) YOUR RESPONSIBILITIES AS A BORROWER 2) HOW LOAN REPAYMENT WORKS 3) SOLUTIONS FOR REPAYMENT PROBLEMS To help you manage your Education Finance Partners Private Loan while you’re in school and after you, we’ve provided this Private Loan Entrance Counseling review. 1) Your responsibilities as a borrower: Follow these guidelines to ensure that you understand the fundamentals of your private loan and know how to use your loan funds responsibly. Review loan documents. Make sure you understand all of the loan terms and conditions. Contact us if you have any questions about the information contained in the documents. Keep copies of your documents for your records. Know how interest and fees are set. Because you are responsible for repaying the money you borrow (the principal), accumulated interest, and any fees or charges, you need to be aware of the details. Rates and fees are determined based on your (and your co-borrower’s, if any) credit history at the time you submit your application. Interest rates may change quarterly based on the fluctuation of the 3-month LIBOR Index published in The Wall Street Journal. Private education loans may provide the same tax benefits as federal student loans. You should consult your tax advisor regarding your specific situation. Stay in touch. Read all correspondence from us, including any emails. Respond promptly to requests and keep notes on any conversations. Maintain a paper trail of correspondence and store it with your loan documents. Inform us of any changes in your name, mailing address, telephone number, email address, or school to help ensure that you receive all correspondence promptly. If you move frequently, you might consider using your family’s permanent address on all loan materials. 2) How loan repayment works: As with any form of credit you borrow, you (and your co-borrower, if any) must pay back your Education Loan. This includes all amounts due under your promissory note—the loan principal, interest, and any fees or charges—regardless of whether you graduate as planned or enter your intended profession. Make timely payments. When in repayment, follow the schedule described in your promissory note. Making payments on your private loan promptly each month can help you establish a good rating on your credit report. A good credit rating can improve your ability to borrow money for something else, such as a car or home, or get a credit card. It may also help you obtain credit at a lower interest rate. To monitor your credit, request a copy of your credit report. You can get one at no charge once every 12 months from each of the three major credit reporting agencies—Equifax.com, Experian.com, and TransUnion.com Consider using automatic debit feature to have your monthly loan payments taken directly out of your checking or savings account. You can schedule your payments to ensure they are on time. Avoid a loan default. If you don’t make your loan payments on time or honor the other terms of your loan agreement, the loan may eventually default. A default will likely have an adverse effect on your credit rating, which could limit your ability to get another loan or a credit card. If your loan defaults, you may have to pay the entire amount of your loan, including interest, immediately. Also, your employer may withhold your wages to pay your debt. Understand the repayment process. You must pay at least the minimum amount shown on your monthly bill. If you fail to pay at least the minimum balance on time, you may incur late fees. In extreme cases,we may notify a collections agency about a borrower who does not repay the loan according to the terms of the promissory note, which will negatively affect the borrower’s credit rating. The maximum repayment period is 240 months. Your repayment is a combination of principal and interest. Because your Education Loan is a variable-rate loan, your monthly payments and the total interest you pay will depend on the movement of interest rates. There is no penalty for prepayment. You may pay more than the minimum payment anytime, which will shorten your repayment term and reduce the amount you’d otherwise pay in interest over the life of the loan. 3) Solutions for repayment problems: If for any reason you’re having difficulty making your minimum monthly payment, you need to contact us right away to discuss your options. Explore payment solutions. If you’re not able to make your minimum monthly payments, you may request forbearance, a temporary postponement or reduction of payments for up to six months. Apply at least 30 days before you want the forbearance to start. You must continue to make your payments until you receive a notice that you are granted forbearance. If you don’t receive forbearance, you must pay your loan as scheduled. Even with forbearance, you’re still responsible for any unpaid interest that accrues during the forbearance period. You can receive forbearance no more than once each calendar year and twice during the life of your loan. Forbearance doesn’t count toward the maximum 240-month repayment period. Avoid delinquency and default. Whatever you do, don’t risk defaulting on your loan and suffering the consequences. Negative information stays on your credit report for seven years, even if you’ve paid the debt in full. You also may be subject to possible legal action or withheld wages. Definitions You Need to Know Credit report – Record of current and past credit transactions that potential lenders use to help determine a person’s ability to pay back debt. Default – Failure to repay a loan according to the terms contained in the promissory note. Delinquency – Status of a loan once a loan payment is past due. The number of days past a payment due date after which the loan is in delinquency may vary from loan to loan. Delinquency may make the borrower ineligible for a deferment, forbearance, or future financial aid. It may also damage chances for obtaining credit in the future. The lender generally delinquencies greater than 30 days to national credit bureaus. Forbearance – Temporary postponement or reduction of loan payments, during the repayment period,bases on financial hardship. The lender or loan servicer, on behalf of the lender, awards forbearance on a case-by-case basis. Interest – Fee charged to borrow money. The lender calculates interest as a percentage of the principal amount owed. LIBOR (London Interbank Offer Rate) – Interest rate offered by a specific group of London banks for U.S. dollar deposits of a stated maturity. The LIBOR is used as a base index for setting rates of some adjustable rate financial instruments. The LIBOR index can be found daily in The Wall Street Journal’s Money Pages. Prepayment – Making loan payments in part, or in full, prior to the due date. Borrowers may Prepay their payments on an Education Finance Partners Private loan anytime without penalty. Principal – Amount of money a lender disburses plus any capitalized interest. Promissory note – Legal contract a borrower (and co-borrower, if any) signs to obtain a loan. The note includes all the terms and conditions of the loan and the borrower’s promise to repay the loan For Remittance Details, please click here
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