paybill wrote:Private student loan term 20 years and Grade Plus loan term 10 years if you borrow $20000 total. I survey the market of various types of loans and I analyze that in next 15 years the interest rates will be between 0.5% to 9.85%.
I analyze differently. Regardless, I don't think any of us are in the position to accurately predict future interest rates. Historically, over the past few decades, PRIME was around 12%.
Reasons for private loan:
-you can't get a Grad Plus loan (foreign student, more than 90 days in default on personal debt and no co-signer who qualifies)
-currently lower interest rates and sometimes "bonuses" for graduating/grades/etc.
-you're a libertarian/Republican/etc. and hate government so much that you're willing to cut off your nose to spite your face
Reasons not to get a private loan:
-deferment and forbearance is often not available
-like gov't loans, they are not really dischargeable short of extreme circumstances (you die, are permanently and totally disabled, etc.)
-PRIME is at a historic low, and 15%+ interest in the future is well within the realm of possibility
-depending on the loan terms, private lenders can accelerate your payments if you miss a payment (or even make it all due at that point)
-no qualification for federal loan forgiveness, either through IBR or federal employment (some federal agencies have loan repayment benefits)
-if you have no/not-good credit history, you may not be able to secure an amount equal to your COA
-if you have a family, the remaining balance on your federal loans is forgiven upon your death... for private lenders, they'll have a claim against your estate, leaving less money for your family/heirs.