Citi Announces One Of Its 'Bold Steps': Stricter Rules On Student Loans

By cwalters May 14, 2008

Two readers have forwarded us a second email sent out by Citibank today, but it’s not another vaguely worded PR blast from the CEO. Instead, this one announces that Citibank is adopting the zero-tolerance approach to late payments favored by the credit card industry—miss a payment due date and you’ll lose any interest rate discount(s) you currently enjoy.

Sean writes,

Just got this email from Citi’s student loan business. Yes, I carry my loans with Citibank, but I consolidated when the interest rate was at rock bottom in spring of 2004. 3% baby!

Looks like if you post your payment one day late, Citibank will terminate any interest-rate deductions you have earned. I guess this is one of the “bold steps” Vikram is taking to shore up profits.

Anyone with loans with Citibank better make damn well sure they pay on time, otherwise it can cost them big time.

 
 
Dear Valued Student Loan Customer,
 
??We are writing to inform you about important changes to the terms of your loan.??To retain your borrower benefits with us, you must make and have your payments posted to your account no later than the scheduled due date. Any payment posted after the due date will result in the termination of such benefit. Interest rate reductions and other benefits do not apply during periods of deferment and/or forbearance and automatically terminate for payments returned for insufficient funds, loan delinquency, default, and/or the purchase of your loan by a guarantor.
 

  

Gosh, Citibank, we were kinda hoping your bold steps would be a bit more consumer friendly, you know?

(Thanks to Sean and Eric!)
(Photo: ElvertBarnes)

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Comments

  1. muffingal says:
    May 15, 2008 at 6:38 pm

    I agree with IronChef.

    Outside of that, I found that Citibank was quick to threaten your credit report when I had my student loans with them. I have never been threaten by a one day late pay with Sallie Mae which is why I chose to consolidate with them a few years back.

  2. mrearly2 says:
    May 16, 2008 at 9:57 am

    There’s the typical bank for you–based on fraud and greedy as hell–all of them, actually.
    “We’ll help you get INTO debt…”
    Technically speaking, you are owned by your creditor. And you own nothing, as long as you’re in debt.

  3. EltonDampyre says:
    May 16, 2008 at 3:09 pm

    Unfortunately this isn’t a new policy and it is used by most you heard me
    most student lenders in the industry. Most of them put it in their fine
    print at least Citibank had the decency to tell their customers. I USED to
    own a student loan company and this has always been the practice. Thank your
    Congress men and woman for it. Since the College Cost Reduction Act passed
    on Oct. 1 lenders have continued to originate loans although it is a
    NEGATIVE proposition. As you may have noticed I used the term USED to in the
    description of my affiliation with the student loan industry. Like hundreds
    of other lenders we had no choice but to close our doors after 6 years
    because we couldn’t continue to originate loans at a loss. Be thankful that
    you have an interest rate reduction, NO LENDERS are currently offering one.
    In fact now most lenders will make you pay the origination fee as well. Put
    the check in the mail a week early or pay online.

    Federal Student
    Loans

    Carlos A. Lopez
    Vice President of Operations EduCare Financial, Inc.
    2300 Tall Pines Drive Ste. 123

    23&csz=Largo%2C+FL+33771&country=us>
    Largo, FL 33771
    clopez@educareloans.com
    tel:
    fax: 727-599-2099

    2099&Email=clopez@educareloans.com>
    727-599-2331

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