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H-18 Private Education Loan Application and Solicitation Model Form Page 1 of 2 [Creditor Name] [Creditor Address} Rates & Loan Terms Current Starting Interest Rates between: % Your starting rate % and [Description of how rate is determined, if applicable] Maximum Interest Rate Your interest rate will vary with the market based on the [Index] Rate (a Term of Loan: publicly available interest rate we use to set the variable rate) but [descrip- [Applicable loan term or terms] tion of maximum rate or lack thereof]. The rate can change [frequency of rate changes] and [description of limit on rate increase at any one time, or lack thereof]. Fees [Itemization of fees] Repayment Options & Sample Costs In-School Repayment options Sample Loan amount (available while continuously enrolled in School) Sample Interest Rate Sample Total Paid (highest possible starting rate) (over [term of loan], including fees) 1. [REPAYMENT OPTION] $10,000.00 [Rate] [Total Cost] $10,000.00 [Rate] [Total Cost] $10,000.00 [Rate] [Total Cost] [Description] 2. [ADDITIONAL REPAYMENT OPTION] [Description] 3. [ADDITIONAL REPAYMENT OPTION] [Description] Federal Loan Alternatives Loan program PERKINS for Students STAFFORD for Students PLUS for Parents Current Interest Rates [Rate] fixed You may qualify for Federal education loans. For additional information, contact your [Rate] fixed Undergraduate subsidized [Rate] fixed Undergraduate unsubsidized & Graduate [Rate] fixed Federal Family Education Loan [Rate] fixed Federal Direct Loan school’s financial aid office or the Department of Education at: federalstudentaid.ed.gov Page 2 of 2 Next Steps 1. Find Out More About Other Loan Options. Some schools have school-specific student loan benefits and terms not detailed on this form. Contact your school’s financial aid office or visit the Department of Education’s web site at federalstudentaid.ed.gov for more information about other loans. 2. To Apply for this Loan, Complete the Application and the School Certification Form. You may get the certification form from your school’s financial aid office. If you are approved for this loan, the loan terms will be available for 30 days (terms will not change during this period, except the variable interest rate may change based on adjustments to the index). REFERENCE NOTES Variable Interest Rate [Variable interest rate information, if applicable] Eligibility Criteria [Description of eligibility criteria] About the Repayment Example [Description of repayment example assumptions] H-19 Private Education Loan Approval Model Form Page 1 of 2 BORROWER: [Name] [Address] CREDITOR: [Name] [Address] Loan Rates & Estimated Total Costs Amount Financed Interest Rate The amount of credit provid- Your current interest rate ed to you or on your behalf. Finance Charge Total of Payments The estimated dollar amount The estimated amount you the credit will cost you. will have paid when you have made all payments. YOUR RATE IS VARIABLE [Description that rate varies and how it is determined, if applicable] For more information on this variable rate, see notes on next page. Based on the current interest rate, your [estimated] annual percentage rate (APR), which is the cost of your loan as a yearly rate, is [APR]%. ITEMIZATION OF AMOUNT FINANCED OTHER FEES • [Itemization of fees] Total Amount Financed Estimated Repayment Schedule & Terms PAYMENT SCHEDULE [Loan Term] [PAYMENT PERIOD, e.g. MONTHLY PAYMENTS) at [Interest Rate]% at [Maximum Rate]% the current rate of your loan [Maximum rate description] The estimated Total of Payments at [Maximum rate description] would be [Dates of deferment period, if applicable] deferment period No payment required No payment required ($[Amount of accrued interest] in (interest will accrue during this interest will accrue during this time) time) [Payment due dates] [number of monthly payments] [Payment Amount] [Payment Amount] [Payment Amount] [Payment Amount] monthly payments [Payment due dates] [number of monthly payments] monthly payments $[total payment amount]. Page 2 of 2 Federal Loan Alternatives Loan program PERKINS for Students STAFFORD for Students PLUS for Parents Current Interest Rates You may qualify for Federal education loans. [Rate] fixed For additional information, contact your school’s financial aid office or the Depart- [Rate] fixed Undergraduate subsidized [Rate] fixed Undergraduate unsubsidized & Graduate [Rate] fixed Federal Family Education Loan [Rate] fixed Federal Direct Loan ment of Education at: federalstudentaid.ed.gov Next Steps & Terms of Acceptance This offer is good until: 1. Find Out More About Other Loan Options. Some schools have school-specific student loan benefits and terms not detailed on this form. Contact your school’s financial aid office for more information. [Date of acceptance deadline] If you have not accepted by [Date of acceptance deadline] we may change the terms of this offer. 2. The Terms of this Loan Offer Are Good for 30 days. You have 30 days from the approval date to accept this offer. The terms of this offer will not change, except that the interest rate may vary with the market rate listed above. To accept the terms [Description of method of acceptance]. REFERENCE NOTES [Variable] Interest Rate: Repayment Options: • [Variable rate information, if applicable] The interest rate may be higher • [Description of deferment options, if applicable] or lower than your Annual Percentage Rate (APR) because the APR accounts for the Interest Rate and certain fees you must pay to obtain Prepayments: this loan, and whether you defer (postpone) payments while in school. • [Prepayment disclosure] • [Description of limitations on rate increases, or lack thereof] Security • You are giving a security interest in [description, if applicable] • [Description of effect of an increase] See your contract documents for any additional information about nonBankruptcy Limitations payment, default, any required repayment in full before the scheduled • If you file for bankruptcy you may still be required to pay back this date, and prepayment refunds and penalties. loan. H-20 Private Education Loan Final Model Form Page 1 of 2 BORROWER: [Name] [Address] RIGHT TO CANCEL You have a right to cancel this transaction, without penalty, by midnight on [Deadline for cancellation]. No funds will be disbursed to you or to your school until after this time. You may cancel by [Method of cancellation]. CREDITOR: [Name] [Address] Loan Rates & Estimated Total Costs Amount Financed Interest Rate The amount of credit provid- Your current interest rate ed to you or on your behalf. Finance Charge Total of Payments The estimated dollar amount The estimated amount you the credit will cost you. will have paid when you have made all payments. YOUR RATE IS VARIABLE [Description that rate varies and how it is determined, if applicable] For more information on this variable rate, see notes on next page. Based on the current interest rate, your [estimated] annual percentage rate (APR), which is the cost of your loan as a yearly rate, is [APR]%. ITEMIZATION OF AMOUNT FINANCED OTHER FEES • [Itemization of fees] Total Amount Financed Estimated Repayment Schedule & Terms PAYMENT SCHEDULE [Loan Term] [PAYMENT PERIOD, e.g. MONTHLY PAYMENTS) at [Interest Rate]% at [Maximum Rate]% the current rate of your loan [Maximum rate description] The estimated Total of Payments at [Maximum rate description] would be $[total payment amount]. [Dates of deferment period, if applicable] deferment period No payment required No payment required ($[Amount of accrued interest] in (interest will accrue during this interest will accrue during this time) time) [Payment due dates] [number of monthly payments] [Payment Amount] [Payment Amount] [Payment Amount] [Payment Amount] monthly payments [Payment due dates] [number of monthly payments] monthly payments Page 2 of 2 REFERENCE NOTES [Variable] Interest Rate: Repayment Options: • [Variable rate information, if applicable] The interest rate may be higher • [Description of deferment options, if applicable] or lower than your Annual Percentage Rate (APR) because the APR accounts for the Interest Rate and certain fees you must pay to obtain Prepayments: this loan, and whether you defer (postpone) payments while in school. • [Prepayment disclosure] • [Description of limitations on rate increases, or lack thereof] Security • You are giving a security interest in [description, if applicable] • [Description of effect of an increase] See your contract documents for any additional information about nonBankruptcy Limitations payment, default, any required repayment in full before the scheduled • If you file for bankruptcy you may still be required to pay back this date, and prepayment refunds and penalties. loan. H-21 Private Education Loan Application and Solicitation Sample Page 1 of 2 First ABC Bank 12345 1st St Anytown, CA 93120 (800) 555 - 5555 Rates & Loan Terms Current Starting Interest Rates between: 7.375% and Your starting rate Your specific rate will be determined based upon your creditworthiness and 17.375% other factors. Maximum Interest Rate Your interest rate will vary with the market based on the LIBOR Rate (a Term of Loan: publicly available interest rate we use to set the variable rate) but will never go amounts up to $20,000: amounts more than $20,000: 20 years above 25%. The rate can change once a month and there is no limit on how 30 years much the rate can increase at one time. Fees Application Fee: $15. Origination Fee: The fees that we charge to make this loan range from 0% to 6%. Late Charge: 5% of the amount of the past due payment, or $25, whichever is greater. Returned check charge: up to $25. Repayment Options & Sample Costs In-School Repayment options Sample Loan amount (available while continuously enrolled in School) 1. MAKE NO PAYMENTS Sample Interest Rate Sample Total Paid (highest possible starting rate) (over 20 years, including fees) $10,000.00 17.375% $67,780.47 $10,000.00 17.375% $46,332.56 $10,000.00 17.375% $38,044.68 Interest will be charged and added to your loan 2. PAY THE INTEREST ONLY Defer payments on the principal amount 3. MAKE FULL PAYMENTS Pay principal and interest See reference notes on next page for more information about this example. Federal Loan Alternatives Loan program PERKINS for Students STAFFORD for Students PLUS for Parents Current Interest Rates 5% fixed You may qualify for Federal education loans. For additional information, contact your school’s financial aid office or the Depart- 6% fixed Undergraduate subsidized 6.8% fixed Undergraduate unsubsidized & Graduate 8.5% fixed Federal Family Education Loan 7.9% fixed Federal Direct Loan ment of Education at: federalstudentaid.ed.gov Page 2 of 2 Next Steps 1. Find Out More About Other Loan Options. Some schools have school-specific student loan benefits and terms not detailed on this form. Contact your school’s financial aid office or visit the Department of Education’s web site at federalstudentaid.ed.gov for more information about other loans. 2. To Apply for this Loan, Complete the Application and the School Certification Form. You may get the certification form from your school’s financial aid office. If you are approved for this loan, the loan terms will be available for 30 days (terms will not change during this period, except the variable interest rate may change based on adjustments to the index). REFERENCE NOTES Variable Interest Rate • Must be 18 years or older at the time of loan application. • This loan has a variable interest rate, that is based on a publicly available index, the London Interbank Offered Rate (LIBOR). Your rate will More information about loan eligibility is available in your loan ap- be calculated each month by adding a margin between 3% and 14% plication and promissory note. to the LIBOR. Eligibility Criteria Borrower • Must be enrolled at an eligible school at least half-time • Must be 18 years or older at the time of loan application. Co-signers • A co-signer is not required, but rates are typically higher without a co-signer About the Repayment Example The repayment example above is based on the highest starting rate currently available and associated fees. It assumes that the borrower remains in school for 4 years and has a 6 month grace period before beginning repayment. Repayment will last 20 years. H-22 Private Education Loan Approval Sample Page 1 of 2 BORROWER: Christopher Smith Jr. 1492 Columbus Way Plymouth, MA 02360 CREDITOR: First ABC Bank 12345 1st St Anytown, CA 93120 Loan Rates & Estimated Total Costs Amount Financed Interest Rate $10,000.00 Finance Charge 7.375% The amount of credit provid- Total of Payments $ 25,506.74 $15,506.74 Your current interest rate ed to you or on your behalf. The estimated dollar amount The estimated amount you the credit will cost you. will have paid when you have made all payments. YOUR RATE IS VARIABLE A variable rate means that your actual rate could be higher or lower than the interest rate indicated on this form, but will never exceed a maximum of 25%. The variable rate is calculated using a publicly available index. For more information on this variable rate, see notes on next page. Based on the current interest rate, your estimated annual percentage rate (APR), which is the cost of your loan as a yearly rate, is 7.059%. ITEMIZATION OF AMOUNT FINANCED Loan Amount OTHER FEES • Late Charge: 5% of the amount of the past $10,000.00 Lender Fee to make the loan (Origination Fee) Total Amount Financed due payment, or $25, whichever is greater. Returned check charge: up to $25. $0.00 $10,000.00 Estimated Repayment Schedule & Terms MONTHLY PAYMENTS PAYMENT SCHEDULE 20 Year Loan Term at 7.375% at 25% the current rate of your loan the maximum rate possible with your loan Sep 1, 2009 - Feb 28, 2014 deferment period Mar 1, 2014 - Feb 28, 2034 239 monthly payments Mar 1, 2034 1 monthly payment No payment required No payment required ($3,318.75 in interest will accrue (interest will accrue during this during this time) time) $106.28 $445.87 $105.82 $452.76 The estimated Total of Payments at the Maximum Rate of Interest would be $107,015.69 Page 2 of 2 Federal Loan Alternatives Loan program PERKINS for Students STAFFORD for Students PLUS for Parents Current Interest Rates You may qualify for Federal education loans. 5% fixed For additional information, contact your school’s financial aid office or the Depart- 6% fixed Undergraduate subsidized 6.8% fixed Undergraduate unsubsidized & Graduate 8.5% fixed Federal Family Education Loan 7.9% fixed Federal Direct Loan ment of Education at: federalstudentaid.ed.gov Next Steps & Terms of Acceptance This offer is good until: 1. Find Out More About Other Loan Options. Some schools have school-specific student loan benefits and terms not detailed on this form. Contact your school’s financial aid office for more information. January 21, 2009 If you have not accepted by January 21, 2009 we may change the terms of this offer. 2. The Terms of this Loan Offer Are Good for 30 days. You have 30 days from the approval date to accept this offer. The terms of this offer will not change, except that the interest rate may vary with the market rate listed above. To accept the terms, contact us at: First ABC Bank 12345 1st St Anytown, CA 93120 (800) 555 - 5555 REFERENCE NOTES Variable Interest Rate: Repayment Options: • Your loan has a variable interest rate, that is based on a publicly • Although you elected to defer (postpone) payments, you can still make available index, the London Interbank Offered Rate (LIBOR), which payments during this time. You can also choose to change your defer- is currently 4.375%. Your rate is calculated each month by adding a ment choice to: Pay Interest Only or Make Full Payments. margin of 3% to the LIBOR. The interest rate may be higher or lower than your Annual Percentage Rate (APR) because the APR accounts Prepayments: for the Interest Rate and certain fees you must pay to obtain this loan, • If you pay off early, you will not have to pay a penalty. You will not be and whether you defer (postpone) payments while in school. entitled to a refund of part of the finance charge. • The rate will not increase more than once a month, but there is no limit on the amount that the rate could increase at one time. Your rate will See your contract documents for any additional information about non- never exceed 25%. payment, default, any required repayment in full before the scheduled • Any increase will take the form of higher monthly payments. Bankruptcy Limitations • If you file for bankruptcy you may still be required to pay back this loan. date, and prepayment refunds and penalties. H-23 Private Education Loan Final Sample Page 1 of 2 CREDITOR: First ABC Bank 12345 1st St Anytown, CA 93120 (800) 555 - 5555 BORROWER: Christopher Smith Jr. 1492 Columbus Way Plymouth, MA 02360 RIGHT TO CANCEL You have a right to cancel this transaction, without penalty, by midnight on January 20, 2009. No funds will be disbursed to you or to your school until after this time. You may cancel by calling us at 800-555-5555. Loan Rates & Estimated Total Costs Amount Financed Interest Rate $10,000.00 Finance Charge 7.375% The amount of credit provid- Total of Payments $ 25,506.74 $15,506.74 Your current interest rate ed to you or on your behalf. The estimated dollar amount The estimated amount you the credit will cost you. will have paid when you have made all payments. YOUR RATE IS VARIABLE A variable rate means that your actual rate could be higher or lower than the interest rate indicated on this form. There is no maximum rate. The variable rate is calculated using a publicly available index. For more information on this variable rate, see notes on next page. Based on the current interest rate, your estimated annual percentage rate (APR), which is the cost of your loan as a yearly rate, is 7.059%. ITEMIZATION OF AMOUNT FINANCED Loan Amount OTHER FEES • Late Charge: 5% of the amount of the past $10,000.00 Lender Fee to make the loan (Origination Fee) Total Amount Financed due payment, or $25, whichever is greater. Returned check charge: up to $25. $0.00 $10,000.00 Estimated Repayment Schedule & Terms MONTHLY PAYMENTS PAYMENT SCHEDULE 20 Year Loan Term Sep 1, 2009 - Feb 28, 2014 deferment period Mar 1, 2014 - Feb 28, 2034 239 monthly payments Mar 1, 2034 1 monthly payment at 7.375% at 21% the current rate of your loan Your loan has no maximum rate. ments if your rate rises to Your payments will be higher if the 21% would be $82,987.39. rate increases above 21%. Your Total of Payments will No payment required No payment required ($3,318.75 in interest will accrue (interest will accrue during this during this time) time) $106.28 $345.75 $105.82 $353.14 The estimated Total of Pay- be higher if rate increases above 21%. Page 2 of 2 REFERENCE NOTES Variable Interest Rate: Repayment Options: • Your loan has a variable interest rate, that is based on a publicly • Although you elected to defer (postpone) payments, you can still make available index, the London Interbank Offered Rate (LIBOR), which payments during this time. You can also choose to change your defer- is currently 4.375%. Your rate is calculated each month by adding a ment choice to: Pay Interest Only or Make Full Payments. margin of 3% to the LIBOR. The interest rate may be higher or lower than your Annual Percentage Rate (APR) because the APR accounts Prepayments: for the Interest Rate and certain fees you must pay to obtain this loan, • If you pay off early, you will not have to pay a penalty. You will not be and whether you defer (postpone) payments while in school. entitled to a refund of part of the finance charge. • The rate will not increase more than once a month, but there is no limit on the amount that the rate could increase at one time. Your loan has See your contract documents for any additional information about non- no maximum rate. payment, default, any required repayment in full before the scheduled • Any increase will take the form of higher monthly payments. Bankruptcy Limitations • If you file for bankruptcy you may still be required to pay back this loan. date, and prepayment refunds and penalties.