What Does Your Loan Offer Mean? Get Answers!
If you received your MPOWER loan offer, also known as a Private Education Loan Approval Disclosure, don’t let it sit without a response. Your loan can’t be funded without you accepting the offer and e-signing the loan documents. We want to provide the information you need to make the best decision for you, so read on to get clarity.
Q: What is the loan approval disclosure?
A: Every student who receives our initial loan approval, also known as a Private Education Loan Approval Disclosure, must decline or accept the loan offer for the loan process to continue. Federal regulations require you to accept this disclosure in order to continue your loan application.
Q: How can I accept or decline my loan approval offer?
A: This can easily be done online in your MPOWER Portal. If you have questions on the loan approval disclosure, don’t wait until the last minute and risk having to start over — contact your relationship manager.
Q: What should I look for in the MPOWER approval offer?
A: Some key items to consider include:
- Take note that, as with all MPOWER loans, your interest rate is fixed.
- Confirm the information listed is accurate, including your school.
- Review your monthly payments but know that the repayment schedule may change after School Certification (if studying in the U.S.) or after you have indicated your disbursement schedule (if studying in Canada).
- Know the date your offer is good until and make sure you accept before the deadline.
- Get familiar with and understand the common terms.
Helpful MPOWER Loan Terms
| Interest Rate | A yearly percentage of the borrowed amount that will be assessed as a cost of financing your loan. |
| Fixed Interest Rate | An interest rate that doesn’t change during the life of the loan. This is favorable in a rising rate environment. |
| Variable Interest Rate | An interest rate that adjusts during the life of the loan based on changes to the relevant market rate. |
| Total Loan Amount | The total amount you are borrowing. |
| Finance Charge | An estimated amount the credit will cost you. This includes the interest charged and loan fees paid during the life of the loan. |
| Annual Percentage Rate (APR) | The cost of your loan as a yearly rate including fees. |
| Origination Fee | A one-time cost — typically a percent of the amount financed. This fee isn’t paid up front or out of pocket; it’s added to the amount borrowed. |
| I-20 | After you’ve been accepted into a U.S. school and paid the SEVIS fee, you will receive Form I-20. This form is required during the U.S. visa process. |
| Support Letter | A document that shows proof of funding. |
Q: Will the estimated payments in my loan offer change?
A: The loan approval estimate is just that — an estimate. Keep in mind that you won’t start making payments until as specified by your school during the school certification process (if you plan to attend a U.S. school) and the funds are disbursed. While you are still in school, and for six months after graduation, you will pay interest-only payments on your loan. Two benefits of making payments while in school include:
- It keeps unpaid interest from accumulating and increasing your loan balance and payments after graduation (otherwise called “negative amortization”).
- It helps you build credit in the U.S. — something you’ll need if you want to apply for other credit products like a credit card.
Q: Can I pay off the loan earlier than the date listed in the loan offer?
A: Yes, you’re able to make payments that are higher than required so you can work toward paying off your loan early. Payments over the minimum amount will be applied to your principal balance and your regular payment will still be due the following month. If you pay off your loan early, you will not have a prepayment penalty or additional fee.
Q: What are the benefits of a fixed-rate loan?
A: Interest rates can either be fixed or variable. When the rate is variable, it can change as frequently as monthly — including sharp increases that will increase your monthly repayment. Fixed interest rates do not change — you know exactly how much you’ll owe each month without having to worry about a rate spike. With MPOWER, you can always count on a fixed-rate loan.
Q: How can I lower my interest rate?
A: You do have the potential to qualify for an interest rate discount!
How can you qualify? Enroll in autopay for a 0.25% reduction in your interest rate for as long as you remain enrolled.
