Private loan bests the Grad PLUS? Forum

[bigben]

There's a middle path you didn't consider: take federal loans, refinance with private loans once the big money job is in the bag. This means you pay slightly more during school, but get the "insurance" of federal flexability, then you stop paying the premium over private loans once you are confident you don't need that "insurance" anymore.

I've been thinking about this. Do you know anyone who has done it? I'm not sure it's possible.

[Anonymous Loser]

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.

Why in the world are the mods responding to half-assed spambot posts resurrecting ancient threads?

[YCrevolution]

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