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Best Egg unclear terms

sgonz261
Regular Contributor

Best Egg unclear terms

I'll be happy to stand corrected but this looks very misleading.

 

Fine Print: "one-time orig fee of your loan amount, deducted from any loan proceeds you receive".

 

Usually I toss these but was curious to check my rate with my new scores since it was SP. The screenshot below suggests that what they actually do is add the orig fee to your qualified rate giving you a total APR, otherwise there is no logical reason/marketing incentive to frame it this way.

 

The $346.60 monthly payment was calculated using 14.99%, so in that scenerio the total loan cost would be $2477.76 (interest)+ $443 (orig fee one-time) = $2920.76

 

If I'm just getting 19.42% with no one-time orig fee then my payments go up to $368.69 and my total cost is $3272.74

 

If I click select which one am I getting bestegg lol?

bestegg1.pngbestegg2.png

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2 REPLIES 2
K-in-Boston
Moderator

Re: Beware of Best Egg

There's nothing really misleading about it as they're required to show you the total cost of the loan as an annualized rate.  The interest rate is 14.99% for the loan, but since they charge an origination fee (several of their competitors do as well, and that's also common in student lending) the actual amount you pay for the loan is greater than the principal and interest alone.  It's also common for mortgages to be framed this way since they need to disclose the total cost, so you may see a 3.25% home loan with a 3.54% APR if there are points involved, for example - that doesn't change the fact that the interest rate is still 3.25%.

 

But if you have an option for say a 17.99% APR loan with no origination fee, you will still save going with the higher APR.

Message 2 of 3
sgonz261
Regular Contributor

Re: Beware of Best Egg

First time seeing a PL broken down like that. Usually when I get a rate I can assume that's my APR and then whatever points they want to charge I can always clearly see the amount in dollars, and always treated as two separate items on the screen.

 

Discover $27,400
BankAmericard MC $29,000
BoA Cash Rewards $10,700
Paypal Credit $11,500
Citi DC $10,700
Amex BCE $9,000
Penfed PCR $10,000
Message 3 of 3
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