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H-18 Private Education Loan Application and Solicitation Model Form Page 1 of 2 [Creditor Name] [Creditor Address] [Creditor Phone Number] Loan Interest Rate & Fees Your starting interest rate will be between % and % Your Starting Interest Rate (upon approval) The starting interest rate you pay will be determined after you apply. [Description of how starting rate is determined]. If approved, we will notify you of the rate you qualify for within the stated range. Your Interest Rate during the life of the loan After the starting rate is set, your rate will then vary with the market Your rate is variable. This means that your rate could move lower or higher than the rates on this form. The variable rate is based upon the [Index] Rate (as published in the [source of index]). For more information on this rate, see the reference notes. [Indication of maximum rate or lack thereof] Loan Fees [Itemization of fees] Loan Cost Examples The total amount you will pay for this loan will vary depending upon when you start to repay it. This example provides estimates based upon [number of repayment options] repayment options available to you while enrolled in school. Repayment Option Amount Provided Interest Rate Loan Term (while enrolled in school) (amount provided (highest possible (how long you have to Total Paid over [term of loan] directly to you or your starting rate) pay off the loan) (includes associated fees) school) 1. [REPAYMENT OPTION] $10,000 [Rate] [Loan Term] [Total Cost] [description of when [Description] repayment begins] 2. [REPAYMENT OPTION] $10,000 [Rate] [Loan Term] [Total Cost] [description of when [Description] repayment begins] 3. [REPAYMENT OPTION] [Description] $10,000 [Rate] [Loan Term] [description of when repayment begins] About this example [Description of example assumptions] [Description of other loan terms, if applicable] [Total Cost] Page 2 of 2 Federal Loan Alternatives Loan program PERKINS for Students STAFFORD for Students PLUS for Parents and Graduate / Professional Students Current Interest Rates by Program Type [Rate] fixed [Rate] fixed Undergraduate subsidized [Rate] fixed Undergraduate unsubsidized & Graduate [Rate] fixed Federal Family Education Loan [Rate] fixed Federal Direct Loan You may qualify for Federal education loans. For additional information, contact your school’s financial aid office or the Department of Education at: www.federalstudentaid.ed.gov Next Steps 1. Find Out 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: www.federalstudentaid.ed.gov for more information about other loans. 2. To Apply for this Loan, Complete the Application and the Self-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 as permitted by law and the variable interest rate may change based on the market). REFERENCE NOTES Variable Interest Rate • [Variable interest rate information, if applicable] Eligibility Criteria • [Description of eligibility criteria] Bankruptcy Limitations • If you file for bankruptcy you may still be required to pay back this loan. More information about loan eligibility and repayment deferral or forbearance options is available in your loan application and loan agreement. H-19 Private Education Loan Approval Model Form Page 1 of 2 BORROWER: [Borrower Name] [Borrower Address] CREDITOR: [Creditor Name] [Creditor Address] Loan Rates & Estimated Total Costs Total Loan Amount Interest Rate The total amount you are Finance Charge Your current interest rate. borrowing. 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. ITEMIZATION OF AMOUNT FINANCED Amount paid to you ABOUT YOUR INTEREST RATE [Amount] Amount paid to others on your Behalf: • [Institution Name] + [Amount] Amount Financed [Description] = [Amount] Initial finance charges (total) • [Charge Type], [Amount] • [Charge Type], [Amount] + [Amount] Total Loan Amount = [Amount] • Your rate is variable. This means that your actual rate varies with the market and could be lower or higher than the rate on this form. The variable rate is based upon the [Index] Rate (as published in the [source of index]). For more information on this rate, see reference notes. • Although your rate will vary, it will never exceed [maximum interest rate] (the maximum allowable [by law] for this loan). • Your Annual Percentage Rate (APR) is [Rate]. The APR is typically different than the Interest Rate since it considers fees and reflects the cost of your loan as a yearly rate. For more information about the APR, see reference notes. FEES • [Itemization of Fees, if applicable] Estimated Repayment Schedule & Terms [PAYMENT PERIOD, e.g. MONTHLY PAYMENTS] [LOAN TERM] at [Interest Rate]% at [Maximum Rate]% the current interest rate of your loan the maximum interest rate possible for your loan [Dates of Deferment Period, if applicable] deferment period No payment required No payment required ([Amount of accrued interest] inter- (Interest will accrue during this est 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 The estimated Total of Payments at the Maximum Rate of Interest would be [Total Payment Amount]. Page 2 of 2 Federal Loan Alternatives Loan program PERKINS for Students STAFFORD for Students PLUS for Parents and Graduate / Professional Students Current Interest Rates by Program Type [Rate] fixed [Rate] fixed Undergraduate subsidized [Rate] fixed Undergraduate unsubsidized & Graduate [Rate] fixed Federal Family Education Loan [Rate] fixed Federal Direct Loan You may qualify for Federal education loans. For additional information, contact your school’s financial aid office or the Department of Education at: www.federalstudentaid.ed.gov Next Steps & Terms of Acceptance This offer is good until: [Date of Acceptance Deadline] 1. Find Out About Other Loan Options. Contact your school’s financial aid office for more information. 2. You Have Until [Date of Acceptance Deadline] to Accept this Offer The terms of this offer will not change except as permitted by law and the variable interest rate may change based on the market. To Accept the Terms of this loan, [Description of method of acceptance] REFERENCE NOTES Variable Interest Rate: Repayment Options: • Your loan has a variable Interest Rate that is based on a publicly avail- • [Description of deferment options, if applicable] able index, the [Index Name], which is currently [Rate]. Your rate is calculated each month by adding a margin of [Margin Rate] to the [Index]. • The Interest Rate may be higher or lower than your Annual Percent- Prepayments: • [Prepayment disclosure] age Rate (APR) because the APR considers certain fees you pay to obtain this loan, the Interest Rate, and whether you defer (postpone) Security payments while in school. • You are giving a security interest in [description, if applicable] • [Description of effect of an increase] See your loan agreement for any additional information about nonpayBankruptcy Limitations ment, default, any required repayment in full before the scheduled date, • If you file for bankruptcy you may still be required to pay back this and prepayment refunds and penalties. loan. H-20 Private Education Loan Final Model Form Page 1 of 2 BORROWER: [Borrower Name] [Borrower Address] CREDITOR: [Creditor Name] [Creditor 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 calling us at [Creditor Phone Number]. Loan Rates & Estimated Total Costs Total Loan Amount Interest Rate The total amount you are Your current interest rate. borrowing. 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. ITEMIZATION OF AMOUNT FINANCED Amount paid to you ABOUT YOUR INTEREST RATE [Amount] Amount paid to others on your Behalf: • [Institution Name] + [Amount] Amount Financed [Description] = [Amount] Initial finance charges (total) • [Charge Type], [Amount] • [Charge Type], [Amount] + [Amount] Total Loan Amount = [Amount] • Your rate is variable. This means that your actual rate varies with the market and could be lower or higher than the rate on this form. The variable rate is based upon the [Index] Rate (as published in the [source of index]). For more information on this rate, see reference notes. • There is no limit on the amount the interest rate can increase. • Your Annual Percentage Rate (APR) is [Rate]. The APR is typically different than the Interest Rate since it considers fees and reflects the cost of your loan as a yearly rate. For more information about the APR, see reference notes. FEES • [Itemization of Fees, if applicable] Estimated Repayment Schedule & Terms [PAYMENT PERIOD, e.g. MONTHLY PAYMENTS] [LOAN TERM] [Dates of Deferment Period, if applicable] deferment period the current interest rate of your loan No Maximum Rate example at 25% Though your loan does not No payment required No payment required have a maximum interest ([Amount of accrued interest] inter- (Interest will accrue during this est will accrue during this time) time) at [Interest Rate]% [Payment Due Dates] [number of monthly payments] [Payment Amount] monthly payments monthly payments (your payments will be higher if the rate increases above 25%) [Payment Due Dates] [number of monthly payments] [Payment Amount] [Payment Amount] [Payment Amount] rate, an example rate of 25% has been used for comparative purposes. The estimated Total of Payments if your rate rises to 25% would be [Total Payment Amount]. Your Total of Payments will be (your payments will be higher if higher if rate increases the rate increases above 25%) above 25%. Page 2 of 2 REFERENCE NOTES Variable Interest Rate: Repayment Options: • Your loan has a variable Interest Rate that is based on a publicly avail- • [Description of deferment options, if applicable] able index, the [Index Name], which is currently [Rate]. Your rate is calculated each month by adding a margin of [Margin Rate] to the [Index]. • The Interest Rate may be higher or lower than your Annual Percent- Prepayments: • [Prepayment disclosure] age Rate (APR) because the APR considers certain fees you pay to obtain this loan, the Interest Rate, and whether you defer (postpone) Security payments while in school. • You are giving a security interest in [description, if applicable] • [Description of effect of an increase] See your loan agreement for any additional information about nonpayBankruptcy Limitations ment, default, any required repayment in full before the scheduled date, • If you file for bankruptcy you may still be required to pay back this 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 Loan Interest Rate & Fees Your Starting Interest Rate (upon approval) Your starting interest rate will be between 7.375% and The starting interest rate you pay will be determined after you apply. It will be based upon your credit history and other factors (co-signer credit, school type, etc). If approved, we will notify you of the rate you qualify for within the stated range. 17.375% Your Interest Rate during the life of the loan After the starting rate is set, your rate will then vary with the market Your rate is variable. This means that your rate could move lower or higher than the rates on this form. The variable rate is based upon the LIBOR Rate (as published in the Wall Street Journal). For more information on this rate, see the reference notes. Although the rate will vary after you are approved, it will never exceed 25% (the maximum allowable for this loan). Loan Fees Application Fee: $15. Origination Fee: The fees that we charge to make this loan range from 0% to 3% of total loan amount. Loan Guarantee Fee: 0% to 3% of total loan amount. Repayment Fee: The fees we charge when you begin repayment range from 0% to 3.5% of the total loan amount. Late Charge: 5% of the amount of the past due payment, or $25, whichever is greater. Returned check charge: up to $25. Loan Cost Examples The total amount you will pay for this loan will vary depending upon when you start to repay it. This example provides estimates based upon three (3) different repayment options available to you while enrolled in school. Repayment Option Amount Provided Interest Rate Loan Term (while enrolled in school) (amount provided (highest possible (how long you have to Total Paid over 20 years directly to you or your starting rate) pay off the loan) (includes associated fees) school) 1. DEFER PAYMENTS $10,000 17.375% 20 years Make no payments while enrolled in school. starting after the Interest will be charged and added to your loan deferment period 2. PAY ONLY THE INTEREST $10,000 17.375% 20 years Make interest payments but defer payments on starting after the the principal amount while enrolled in school. deferment period 3. MAKE FULL PAYMENTS Pay both the principal and interest amounts while enrolled in school. $10,000 17.375% 20 years $81,084 $50,707 $38,180 starting after your first payment About this example The repayment example assumes that you remain in school for 4 years and have a 6 month grace period before beginning repayment. It is based on the highest starting rate currently charged and associated fees. For loan amounts up to $20,000, repayment will last 20 years, starting once the initial principal payment is made. For loan amounts more than $20,000 repayment will last 30 years, starting once the initial principal payment is made. Page 2 of 2 Federal Loan Alternatives Loan program PERKINS for Students STAFFORD for Students PLUS for Parents and Graduate / Professional Students Current Interest Rates by Program Type 5% fixed 5.6% fixed Undergraduate subsidized 6.8% fixed Undergraduate unsubsidized & Graduate 8.5% fixed Federal Family Education Loan 7.9% fixed Federal Direct Loan You may qualify for Federal education loans. For additional information, contact your school’s financial aid office or the Department of Education at: www.federalstudentaid.ed.gov Next Steps 1. Find Out 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: www.federalstudentaid.ed.gov for more information about other loans. 2. To Apply for this Loan, Complete the Application and the Self-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 as permitted by law and the variable interest rate may change based on the market). REFERENCE NOTES Variable Interest Rate Co-signers • This loan has a variable interest rate, that is based on a publicly avail- • Rates are typically higher without a co-signer. able index, the London Interbank Offered Rate (LIBOR). Your rate will • Must be 18 years or older at the time of loan application. be calculated each month by adding a margin between 3% and 13% to the LIBOR. • 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. Bankruptcy Limitations • If you file for bankruptcy you may still be required to pay back this loan. Eligibility Criteria More information about loan eligibility and repayment deferral or Borrower forbearance options is available in your loan application and loan • Must be enrolled at an eligible school at least half-time. agreement. • Must be 18 years or older at the time you apply. 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 Total Loan Amount Interest Rate Finance Charge $18,541.24 7.375% $10,600.00 The total amount you are Total of Payments Your current interest rate. borrowing. $ 28,541.24 The estimated dollar amount The estimated amount you the credit will cost you. will have paid when you have made all payments. ITEMIZATION OF AMOUNT FINANCED Amount paid to you ABOUT YOUR INTEREST RATE $0.00 Amount paid to others on your Behalf: • ABC State University + $10,000 Amount Financed (total amount provided) = $10,000 Initial finance charges (total) • Origination Fee ($300) • Loan Guarantee Fee ($300) + $600 Total Loan Amount = $10,600 • Your rate is variable. This means that your actual rate varies with the market and could be lower or higher than the rate on this form. The variable rate is based upon the LIBOR Rate (as published in the Wall Street Journal). For more information on this rate, see reference notes. • Although your rate will vary, it will never exceed 25% (the maximum allowable for this loan). • Your Annual Percentage Rate (APR) is 8.23%. The APR is typically different than the Interest Rate since it considers fees and reflects the cost of your loan as a yearly rate. For more information about the APR, see reference notes. FEES • Late Charge: 5% of the amount of the past due payment, or $25, whichever is greater. • Returned check charge: up to $25. • Fee when you begin repaying the loan: 3.5% of loan balance. Estimated Repayment Schedule & Terms MONTHLY PAYMENTS 20 YEAR LOAN TERM at 7.375% at 25% the current interest rate of your loan the maximum interest rate possible for your loan Sept. 1, 2009 - Oct. 31, 2013 deferment period Nov. 1, 2013 - Sept. 30, 2033 239 monthly payments Oct. 1, 2033 1 monthly payment No payment required No payment required ($3,799.67 in interest will accrue (Interest will accrue during this during this time) time) $118.93 $645.41 $116.97 $674.63 The estimated Total of Payments at the Maximum Rate of Interest would be $154,928. Page 2 of 2 Federal Loan Alternatives Loan program PERKINS for Students STAFFORD for Students PLUS for Parents and Graduate / Professional Students Current Interest Rates by Program Type 5% fixed 5.6% fixed Undergraduate subsidized 6.8% fixed Undergraduate unsubsidized & Graduate 8.5% fixed Federal Family Education Loan 7.9% fixed Federal Direct Loan You may qualify for Federal education loans. For additional information, contact your school’s financial aid office or the Department of Education at: www.federalstudentaid.ed.gov Next Steps & Terms of Acceptance This offer is good until: August 1, 2009 1. Find Out About Other Loan Options. Contact your school’s financial aid office for more information. 2. You Have Until August 1, 2009 to Accept this Offer The terms of this offer will not change except as permitted by law and the variable interest may change based on the market. To Accept the Terms of this loan, 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 avail- • Although you elected to postpone payments, you can still make pay- able index, the London Interbank Offered Rate (LIBOR), which is cur- ments while you are in school. You can also choose to change your rently 4.375%. Your rate is calculated each month by adding a margin deferment choice to: Pay Interest Only or Make Full Payments. More of 3% to the LIBOR. • The Interest Rate may be higher or lower than your Annual Percent- information about repayment deferral or forbearance options is available in your loan agreement. age Rate (APR) because the APR considers certain fees you pay to obtain this loan, the Interest Rate, and whether you defer (postpone) Prepayments: payments while in school. • If you pay the loan off early, you will not have to pay a penalty. You will • The rate will not increase more than once a month, but there is no limit not be entitled to a refund of part of the finance charge. on the amount that the rate could increase at one time. Your rate will never exceed 25%. • If the Interest Rate increases your monthly payments will be higher. See your loan agreement for any additional information about nonpayment, default, any required repayment in full before the scheduled date, and prepayment refunds and penalties. Bankruptcy Limitations • If you file for bankruptcy you may still be required to pay back this loan. H-23 Private Education Loan Final Sample Page 1 of 2 BORROWER: Christopher Smith Jr. 1492 Columbus Way Plymouth, MA 02360 RIGHT TO CANCEL CREDITOR: First ABC Bank 12345 1st St Anytown, CA 93120 (800) 555 - 5555 You have a right to cancel this transaction, without penalty, by midnight on August 4, 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 Total Loan Amount Interest Rate Finance Charge $18,541.24 7.375% $10,600.00 The total amount you are Total of Payments Your current interest rate. borrowing. $ 28,541.24 The estimated dollar amount The estimated amount you the credit will cost you. will have paid when you have made all payments. ITEMIZATION OF AMOUNT FINANCED Amount paid to you ABOUT YOUR INTEREST RATE $0.00 Amount paid to others on your Behalf: • ABC State University + $10,000 Amount Financed (total amount provided) = $10,000 Initial finance charges (total) • Origination Fee ($300) • Loan Guarantee Fee ($300) + $600 Total Loan Amount = $10,600 • Your rate is variable. This means that your actual rate varies with the market and could be lower or higher than the rate on this form. The variable rate is based upon the LIBOR Rate (as published in the Wall Street Journal). For more information on this rate, see reference notes. • There is no limit on the amount the interest rate can increase. • Your Annual Percentage Rate (APR) is 8.23%. The APR is typically different than the Interest Rate since it considers fees and reflects the cost of your loan as a yearly rate. For more information about the APR, see reference notes. FEES • Late Charge: 5% of the amount of the past due payment, or $25, whichever is greater. • Returned check charge: up to $25. • Fee when you begin repaying the loan: 3.5% of loan balance. Estimated Repayment Schedule & Terms MONTHLY PAYMENTS 20 YEAR LOAN TERM Sept. 1, 2009 - Oct. 31, 2013 deferment period the current interest rate of your loan No Maximum Rate example at 25% No payment required No payment required ($3,799.67 in interest will accrue (Interest will accrue during this during this time) time) at 7.375% Nov. 1, 2013 - Sept. 30, 2033 239 monthly payments $118.93 $645.41 (your payments will be higher if the rate increases above 25%) Oct. 1, 2033 1 monthly payment $116.97 $674.63 (your payments will be higher if the rate increases above 25%) Though your loan does not have a maximum interest rate, an example rate of 25% has been used for comparative purposes. The estimated Total of Payments if your rate rises to 25% would be $154,928. Your Total of Payments will be higher if rate increases above 25%. Page 2 of 2 REFERENCE NOTES Variable Interest Rate: Repayment Options: • Your loan has a variable Interest Rate that is based on a publicly avail- • Although you elected to postpone payments, you can still make pay- able index, the London Interbank Offered Rate (LIBOR), which is cur- ments while you are in school. You can also choose to change your rently 4.375%. Your rate is calculated each month by adding a margin deferment choice to: Pay Interest Only or Make Full Payments. More of 3% to the LIBOR. information about repayment deferral or forbearance options is avail- • The Interest Rate may be higher or lower than your Annual Percent- able in your loan agreement. age Rate (APR) because the APR considers certain fees you pay to obtain this loan, the Interest Rate, and whether you defer (postpone) Prepayments: payments while in school. • If you pay the loan off early, you will not have to pay a penalty. You will • The rate will not increase more than once a month, but there is no limit not be entitled to a refund of part of the finance charge. on the amount that the rate could increase at one time. Your rate will never exceed 25%. • If the Interest Rate increases your monthly payments will be higher. See your loan agreement for any additional information about nonpayment, default, any required repayment in full before the scheduled date, and prepayment refunds and penalties. Bankruptcy Limitations • If you file for bankruptcy you may still be required to pay back this loan.