 |
  |
Glossary
Below are some terms frequently used when discussing GradeSaver student loans.
Accrued Interest - Interest that accumulates on the unpaid principal balance of a loan.
Annual Percentage Rate (APR) - The effective interest rate when all finance charges and upfront fees are included. The APR on a loan may vary among lenders because of differences in upfront fees, interest rates and other loan terms.
Capitalization or Capitalized Interest - Occurs when accrued unpaid interest is added to the principal balance of a loan.
Co-signer (or co-applicant, or co-borrower) - Any individual, other than the primary borrower, who signs your loan documents and thereby agrees to be equally responsible for the repayment of that loan. The co-signer is typically a parent or other relative.
Consolidation - Occurs when you refinance one or more education loans into one new loan with a new repayment term and interest rate.
Credit Agreement (or Loan Documents) - Contract between a borrower and a lender that includes the terms and conditions under which the borrower promises to repay the loan.
Credit Bureau - An agency that collects and distributes credit and personal information to creditors. A credit report from a bureau might include payment history on loans and other credit accounts (such as credit cards), balances of accounts, and length and place of employment.
Creditready - For most loan programs, an applicant is "creditready" if s/he:
- Has good or no credit history; and
- Is a U.S. citizen or permanent resident who has resided in the U.S. for the previous two years.
Creditworthy - For most loan programs, an applicant is "creditworthy" if s/he:
- Has a satisfactory residence and employment history of at least 2 years;
- Has at least 21 months of credit experience and a satisfactory credit history;
- Has proof of current income (if self employed, has been in business for at least two years); and
- Is a U.S. citizen or permanent resident who has resided in the U.S. for the previous two years.
Default (also, Delinquency) - Failure to meet the terms and conditions of a loan, including failure to make required payments on time.
Deferment - A period when a borrower, who meets certain criteria, is not required to make payments.
Delinquency (also, Default) - Failure to make required loan payments on time.
Disbursement - Occurs when the lender sends the loan funds to the school or borrower.
Disclosure Statement - Statement sent by the lender to the borrower describing the estimated costs of a loan, the interest rate and any additional finance charges.
Electronic Funds Transfer (EFT) - Any transfer of funds that is initiated through electronic means, such as a wire transfer from a bank to a school.
Eligible Borrower - An individual who meets all criteria required for loan approval.
Forbearance - A special arrangement between a borrower who has experienced certain hardships (such as severe medical problems) and the lender in which the lender allows the borrower to temporarily stop making payments or to make smaller payments than would otherwise be required.
Interest Rate - The cost of borrowing money, expressed as a percentage, over a period of time.
Interest-only Payment - A payment that covers only interest that accrues on the loan and does not result in reductions in the principal balance.
Lender - The bank, credit union, or other financial institution from which you have borrowed your student loan funds.
Loan Limits - The minimum and/or maximum amount of money an applicant may borrow from a lender under a specific loan program during a specific time period.
Origination Fee - A fee charged to the borrower by the lender for processing the loan application and originating the loan.
Principal - Amount borrowed plus any capitalized fees. Principal may increase as a result of interest capitalization.
Repayment Period - The period during which a loan must be repaid.
Copyright (C) 2007 GradeSaver Loans LLC. All rights reserved.
The lender for Gradesaver Student Loans is RBS Citizens, N.A., Member FDIC and Equal Opportunity Lender. RBS Citizens, N.A. may sell your student loan to a third party. RBS Citizens, N.A. will only sell your student loan if the third party agrees to honor all of RBS Citizens, N.A.'s promises to you, including all promised benefits that you will receive or might become eligible for during the loan repayment period.