Where can I find private loans?

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sophistical
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Where can I find private loans?

Postby sophistical » Fri May 04, 2012 11:09 pm

i don't even know where to begin. is there a list of private lenders out there? which lenders have you used? many people just go for graduate plus after their $20,500 stafford loan is exceeded, but i want to see if i can find a private lender with potentially lower interest rates.

also do any private educational loans have fixed interest rates, or do they all have variable interest?

if you know any, examples of any private lenders would be a good start.

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rinkrat19
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Re: Where can I find private loans?

Postby rinkrat19 » Fri May 04, 2012 11:10 pm

Google 'banks'

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gossipgirl
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Re: Where can I find private loans?

Postby gossipgirl » Fri May 04, 2012 11:14 pm

Discover: https://www.discover.com/student-loans/ ... loans.html
Sallie Mae: https://www.salliemae.com/
Chase: http://www.chasestudentloans.com/
Wells Fargo: https://www.wellsfargo.com/student/plan ... ps/private
...and many more

Check this link for a summary of many private loans: http://www.finaid.org/loans/privatestudentloans.phtml

I was able to get a LIBOR + 0% from Discover so I know that it's not just a marketing ploy that they market that rate on their website. 3.25% is MUCH better than your GradPlus loans at 7.9%, even considering that it's a variable rate loan.

CyLaw
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Re: Where can I find private loans?

Postby CyLaw » Fri May 04, 2012 11:22 pm

gossipgirl wrote:I was able to get a LIBOR + 0% from Discover so I know that it's not just a marketing ploy that they market that rate on their website. 3.25% is MUCH better than your GradPlus loans at 7.9%, even considering that it's a variable rate loan.


Do you mean PRIME + 0%? The current LIBOR rates range from 0.23875% to 1.0472% whereas current prime is 3.25%

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gossipgirl
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Re: Where can I find private loans?

Postby gossipgirl » Fri May 04, 2012 11:23 pm

CyLaw wrote:
gossipgirl wrote:I was able to get a LIBOR + 0% from Discover so I know that it's not just a marketing ploy that they market that rate on their website. 3.25% is MUCH better than your GradPlus loans at 7.9%, even considering that it's a variable rate loan.


Do you mean PRIME + 0%? The current LIBOR rates range from 0.23875% to 1.0472% whereas current prime is 3.25%


Yeah my bad, meant PRIME + 0%

sophistical
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Re: Where can I find private loans?

Postby sophistical » Sat May 05, 2012 1:31 am

thanks for the links gossipgirl! the finaid.org one was particularly helpful, because it gave a chart comparing the available loans. i'm glad i asked here before rushing off to get a graduate plus loan without considering other possibilities.

i'm literally completely new to loans. is there a guide somewhere where i can read more about terms like "LIBOR", "PRIME", and origination fees?

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blurbz
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Re: Where can I find private loans?

Postby blurbz » Sat May 05, 2012 1:36 am

May also want to check: A lot of these may require a cosigner where the government loans do not. Just another consideration to watch out for!

CyLaw
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Re: Where can I find private loans?

Postby CyLaw » Sat May 05, 2012 8:23 am

sophistical wrote:thanks for the links gossipgirl! the finaid.org one was particularly helpful, because it gave a chart comparing the available loans. i'm glad i asked here before rushing off to get a graduate plus loan without considering other possibilities.

i'm literally completely new to loans. is there a guide somewhere where i can read more about terms like "LIBOR", "PRIME", and origination fees?


LIBOR = London Interbank Offered Rate, the interest rate that banks borrow money between each other. Not available to individual people.

PRIME = Prime Interest Rate, lowest rate available that all banks offer to the best customers. Normally moves in sync with the federal reserves lending interest rate (the rate banks are charged to borrow from the federal reserve).

Origination fees = How much off the top is taken from the loan to cover the cost of making the loan. If you take out a loan for $10,000 with a 2.5% origination fee, your loan principal will be $10,000 but you will only get $9,750 disbursed.

Variable Loans are normally defined as (Prime + X) meaning the interest rate will adjust to always be a certain interest rate above PRIME. This types of loans are inherently more risky than fixed rate loans, even at Prime + 0%, because there is no telling how high PRIME will go. (It has often been above 8% just not recently.)

Further, don't forget that private loans do not have all the protections of federal loans, are not eligible for IBR, not eligible for the federal Public Service Loan Forgiveness Program (google it if you don't know about it), and if you need a co-signer, private loans may not necessarily be forgiven upon your death.

If you are paying sticker and there is any change you will be working for the government, in public interest, or any other job that doesn't pay $160,000, I would not suggest private loans due to the lack of IBR.

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gossipgirl
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Re: Where can I find private loans?

Postby gossipgirl » Sat May 05, 2012 9:11 am

CyLaw wrote:
sophistical wrote:thanks for the links gossipgirl! the finaid.org one was particularly helpful, because it gave a chart comparing the available loans. i'm glad i asked here before rushing off to get a graduate plus loan without considering other possibilities.

i'm literally completely new to loans. is there a guide somewhere where i can read more about terms like "LIBOR", "PRIME", and origination fees?


LIBOR = London Interbank Offered Rate, the interest rate that banks borrow money between each other. Not available to individual people.

PRIME = Prime Interest Rate, lowest rate available that all banks offer to the best customers. Normally moves in sync with the federal reserves lending interest rate (the rate banks are charged to borrow from the federal reserve).

Origination fees = How much off the top is taken from the loan to cover the cost of making the loan. If you take out a loan for $10,000 with a 2.5% origination fee, your loan principal will be $10,000 but you will only get $9,750 disbursed.

Variable Loans are normally defined as (Prime + X) meaning the interest rate will adjust to always be a certain interest rate above PRIME. This types of loans are inherently more risky than fixed rate loans, even at Prime + 0%, because there is no telling how high PRIME will go. (It has often been above 8% just not recently.)

Further, don't forget that private loans do not have all the protections of federal loans, are not eligible for IBR, not eligible for the federal Public Service Loan Forgiveness Program (google it if you don't know about it), and if you need a co-signer, private loans may not necessarily be forgiven upon your death.

If you are paying sticker and there is any change you will be working for the government, in public interest, or any other job that doesn't pay $160,000, I would not suggest private loans due to the lack of IBR.


+1, great summary there

I just want to point out, for the sake of a devil's advocate, that while the PRIME index has been greater than 7.9%, in the last 10 years, it's under 7.9% much more often than over (see: http://www.moneycafe.com/library/primerate.htm). I know it sounds risky to take a variable rate loan but the chance that the economy goes back to the late 06-early 08 levels anytime before you start paying off your loans is unlikely even with the optimistic of economic projections. I feel like you have to embrace the 3.25% interest rate right now and if it ever goes up to 8.1% like in 06-08, rest assured that you made up that difference in extra interest during times like right now where it's significantly under 7.9%.

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Nom Sawyer
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Re: Where can I find private loans?

Postby Nom Sawyer » Sat May 05, 2012 9:24 am

I wrote a guide on this for the TLS content stuff a while back... should cover a lot of the stuff you need to know:

viewtopic.php?f=22&t=124530

005618502
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Re: Where can I find private loans?

Postby 005618502 » Thu May 24, 2012 12:21 pm

Bumping this thread. Was offered a SallieMae loan for school at just under 4% APR. I plan to pay all my interest off each month as it accrues. I will be going about 150k in debt at a T14. Should I risk the private loans? I know I do not want to do public interest or work for the government (at all) but if I dont do well am I screwing myself by doing private loans?

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Nom Sawyer
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Re: Where can I find private loans?

Postby Nom Sawyer » Thu May 24, 2012 12:24 pm

AssumptionRequired wrote:Bumping this thread. Was offered a SallieMae loan for school at just under 4% APR. I plan to pay all my interest off each month as it accrues. I will be going about 150k in debt at a T14. Should I risk the private loans? I know I do not want to do public interest or work for the government (at all) but if I dont do well am I screwing myself by doing private loans?


Check the part about "Should I choose Private v Public Loans", it'll cover the basics of what you should be looking at it in deciding: viewtopic.php?f=22&t=124530

let me know if you have any specific questions. (Also 4% is a very competitive rate, just make sure you're clear on your school's LRAP policies + your own career goals)

CyLaw
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Re: Where can I find private loans?

Postby CyLaw » Fri May 25, 2012 7:59 am

AssumptionRequired wrote:Bumping this thread. Was offered a SallieMae loan for school at just under 4% APR. I plan to pay all my interest off each month as it accrues. I will be going about 150k in debt at a T14. Should I risk the private loans? I know I do not want to do public interest or work for the government (at all) but if I dont do well am I screwing myself by doing private loans?


Why are you planning to pay off the interest as it accrues. You would be better off taking out less money. The money you are applying to interest is money you had to borrow and you are paying interest on.

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20130312
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Re: Where can I find private loans?

Postby 20130312 » Fri May 25, 2012 8:30 am

Check dem fees. Private banks lerv origination fees and other bullshit.

005618502
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Re: Where can I find private loans?

Postby 005618502 » Fri May 25, 2012 12:29 pm

CyLaw wrote:
AssumptionRequired wrote:Bumping this thread. Was offered a SallieMae loan for school at just under 4% APR. I plan to pay all my interest off each month as it accrues. I will be going about 150k in debt at a T14. Should I risk the private loans? I know I do not want to do public interest or work for the government (at all) but if I dont do well am I screwing myself by doing private loans?


Why are you planning to pay off the interest as it accrues. You would be better off taking out less money. The money you are applying to interest is money you had to borrow and you are paying interest on.


This would be money coming through my gf who will be working while I am in school. I am not going to take out more than needed, but each month she could put a little toward my loan interest I think this would be beneficial.




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