Preferred Lender Selection Process
In creating our Preferred Lender Lists, we have considered several factors:
Our preferred lenders offer competitive benefits such as zero origination fees for BC loans, interest rate reductions for borrowers who sign up for electronic payments, and principal reductions for borrowers who make a certain number of on-time, consecutive payments. We monitor changes in these benefits offered by each lender to ensure that our preferred lenders offer the best benefits available to our students.
All of our preferred lenders have provided consistently excellent service to BC borrowers for many years. We listen carefully to feedback from our students and parents on the level of service. If a lender on our list generates complaints, we strongly consider removing them from our list. These lenders have all agreed to working with BC's processing system and can insure quick turnaround time for disbursements.
Variety of Types of Lenders
Some students and parents may already be doing business with a credit union rather than a national bank or vice versa. Some borrowers are more comfortable with a small lender as opposed to a national one. Because of these kinds of reasons, we are careful to include a wide variety of types of lenders on our list.
Our preferred lender list is reviewed each year and updated when necessary based on the criteria listed above. The Boston College Financial Aid area of the Office of Student Services does not receive, and will not accept, inducements from lenders in exchange for inclusion on this list. Additionally, Boston College does not share in the profits from PLUS or Alternative loans. Borrowers are welcome to choose any lender that participates in the PLUS or Alternative loan process, regardless of whether or not it is on our preferred lender list.
If you would like to provide feedback on our preferred lender list, we welcome you to do so. Please email us at firstname.lastname@example.org, call us at 800-294-0294, or visit us in Lyons Hall, Room 103.
The cost of borrowing money, usually expressed as a percentage, paid to the lender.
Why am I charged interest?
- Borrowers pay interest for the privilege of borrowing.
- Lenders charge borrowers fees and interest for the use of their money.
- Interest is charged because the lender is taking a risk lending money to a borrower.
Fixed Interest Rate
An interest rate that remains the same for a set period of time, regardless of the changing underlying interest rate index.
Advantages of a Fixed Interest Rate
- Borrower will know what all future monthly payments will be.
- Monthly payments will never change.
- Borrower can calculate how long it will take to pay off all the interest and principal.
Disadvantages of a Fixed Interest Rate
- Might have a higher monthly payment than with other interest rate loans.
- This is due to the fact that lenders are making borrowers pay for this luxury.
- Interest rate will never go down even if underlying interest rate index goes down.
Variable Interest Rate
An interest rate that moves up and down based on the changes of an underlying interest rate index.
Advantages of a Variable Interest Rate
- Offer the most attractive interest rates at the beginning of the loan.
- A borrower’s interest rate can go down if the underlying interest rate index goes down.
- Might be a cap on the interest rate.
Disadvantages of a Variable Interest Rate
- Monthly payments will fluctuate as interest rate fluctuates.
- Might not be a cap on the interest rate (Massachusetts capped at 18%).
- Interest rate and monthly payments will be adjusted monthly, semi-annually, annually, etc.