got a certain rate for sallie mae private loan

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theaether
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Joined: Sun Dec 19, 2010 6:17 am

got a certain rate for sallie mae private loan

Postby theaether » Mon Apr 16, 2012 10:50 pm

did it with a cosigner, but got a rate much higher than I expected. Would shopping around with other lenders give a significantly better rate or the Sallie Mae rate pretty much it +/- 1%?

PrincetonBound15
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Re: got a certain rate for sallie mae private loan

Postby PrincetonBound15 » Tue Apr 17, 2012 1:23 am

theaether wrote:did it with a cosigner, but got a rate much higher than I expected. Would shopping around with other lenders give a significantly better rate or the Sallie Mae rate pretty much it +/- 1%?


As a finance enthusiast, I would highly recommend shopping around for better rates. Then again, it depends on your credit score and that of your co-signer's. There are plenty of options out there - I suggest you read up on them.

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cedarseoul
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Re: got a certain rate for sallie mae private loan

Postby cedarseoul » Tue Apr 17, 2012 8:35 pm

Out of curiosity - why would one elect to go with Sallie Mae over Grad Plus? Does SM even offer fixed interest rates? If not, I'd be very hesitant to apply for a variable loan NOW (when the rates are artificially low thanks to the FED) and then watch my interest climb several percentage points when monetary policy is tightened...

theaether
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Joined: Sun Dec 19, 2010 6:17 am

Re: got a certain rate for sallie mae private loan

Postby theaether » Tue Apr 17, 2012 8:43 pm

cedarseoul wrote:Out of curiosity - why would one elect to go with Sallie Mae over Grad Plus? Does SM even offer fixed interest rates? If not, I'd be very hesitant to apply for a variable loan NOW (when the rates are artificially low thanks to the FED) and then watch my interest climb several percentage points when monetary policy is tightened...


their rates start at 2.25+libor, so if you can get that kind of rate, it's pretty good. but you're right, it would require fast repayment if rates start to rise

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dingbat
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Re: got a certain rate for sallie mae private loan

Postby dingbat » Fri Apr 20, 2012 8:35 am

theaether wrote:
cedarseoul wrote:Out of curiosity - why would one elect to go with Sallie Mae over Grad Plus? Does SM even offer fixed interest rates? If not, I'd be very hesitant to apply for a variable loan NOW (when the rates are artificially low thanks to the FED) and then watch my interest climb several percentage points when monetary policy is tightened...


their rates start at 2.25+libor, so if you can get that kind of rate, it's pretty good. but you're right, it would require fast repayment if rates start to rise

That's pretty freaking sweet - but you really need to be planning on aggressive downpayment, because rates will rise at some point.

Perhaps you might want to hedge your bet and do part GradPlus & part Libor based?

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cedarseoul
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Re: got a certain rate for sallie mae private loan

Postby cedarseoul » Sat Apr 21, 2012 9:39 pm

The other factor is IBR. If you expect to be in a position to rapidly pay off the debt, then I guess 2.25+LIBOR is a good deal (esp. since the Fed plans to retain near-zero rates into 2014, and I believe LIBOR is influenced by the Fed rate?). But I'm not sure what I'll end up doing (professionally), and I don't have tremendous confidence in my potential to earn a high salary right away...so I'd like to have the option to control my repayment. Private loans (like Sallie Mae) cannot be consolidated under IBR, ICR, or any of the federal consolidation programs.

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dingbat
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Re: got a certain rate for sallie mae private loan

Postby dingbat » Sat Apr 21, 2012 9:56 pm

cedarseoul wrote:The other factor is IBR. If you expect to be in a position to rapidly pay off the debt, then I guess 2.25+LIBOR is a good deal (esp. since the Fed plans to retain near-zero rates into 2014, and I believe LIBOR is influenced by the Fed rate?). But I'm not sure what I'll end up doing (professionally), and I don't have tremendous confidence in my potential to earn a high salary right away...so I'd like to have the option to control my repayment. Private loans (like Sallie Mae) cannot be consolidated under IBR, ICR, or any of the federal consolidation programs.

LIBOR stands for London InterBank Offered Rate
It is the rate at which (international) banks lend to each other.

It is not directly related to the fed rate (it has nothing to do with the Fed).
However, while the fed rate and LIBOR are independent if each other, they do impact one another, so a drastic change in one will cause a change in the other

It's hard to predict how long LIBOR will stay where it is if you consider the potential issues in Europe at the moment (please lets not get into a discussion on this)




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