Private Loan Business Introduction and Analysis

Federal Student Loans

Bank Student Loans

44%

2%3%11%

18%

22%

Share

Banks Non-profitSchool as LenderStatel Loan AgenciesNon-bankDirect Lending

Private student loan is a finance product that can either supplement or replace the federal loans

Profit Generation

How does business earn profit? A case spread analysis for Stanford and PLUS loans originated after Oct 1, 2007.

Industry Trend

• Lack of liquidity has lead to an unprecedented exodus of education lenders from private student loans

• Credit crisis ( credit score increase from 620-650 and approval rate drop by 10% to 25%).

• The cost of student loans increase

Regional Main Players

SallieMae

Developed from a federal

loan since 1977

Biggest student

loan lender

Citizens Bank

25 years in student

loan business

Interest rate

reduction with

opening a Citizen

account

PNC

Interest rate

reduction with

monthly auto

payment

Discover

Various product

segmentations

Union

No prepayment

penalty

Fast credit check

Buying Factors

• Different interest when student is in school and another after graduationInterest Rate(APR)

• Payable immediately, interest-only loans while the student is enrolled, and no-payment loans until graduationPayment options

• Improved or tougher terms maybe offered based on the student's payment recordIncentives

• A fee is charged for originating the loan that is added to the principal of the loan.Origination

• Whether this product information is approached easilyAccessible

• The quality of sales serviceService