Taking out a non-interest loan? Forum
- Tempo
- Posts: 96
- Joined: Wed Jan 06, 2016 9:54 pm
Taking out a non-interest loan?
My grandfather recently offered to loan me the extra 150k I need for law school, and he wouldn't charge me interest. Would this be worth doing if I don't know what kind of law I want to practice? If I took out federal loans, then I would have a chance of LRAP. If I do this, then I won't be able to have my loans forgiven or paid off. What do people think?
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- Joined: Wed Mar 02, 2016 2:21 am
Re: Taking out a non-interest loan?
Before you do it, negotiate a repayment plan that would work for you no matter if you're in public interest or the private sector. It would be very foolish to let this opportunity slide by.
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Re: Taking out a non-interest loan?
Propose this to your grandfather - table the 150k offer for three years. Do your time in school, and if you pursue an LRAP eligible career, then decline the loan. If not, take the loan at that point to pay off your federal loans and pay him back instead. There would be some accrued interest over your time in school, but I would say that's worth it as a reasonable balance.Tempo wrote:My grandfather recently offered to loan me the extra 150k I need for law school, and he wouldn't charge me interest. Would this be worth doing if I don't know what kind of law I want to practice? If I took out federal loans, then I would have a chance of LRAP. If I do this, then I won't be able to have my loans forgiven or paid off. What do people think?
- Tempo
- Posts: 96
- Joined: Wed Jan 06, 2016 9:54 pm
Re: Taking out a non-interest loan?
That's a very good idea. I'll talk to him about that, thanks.Holodigm wrote:Propose this to your grandfather - table the 150k offer for three years. Do your time in school, and if you pursue an LRAP eligible career, then decline the loan. If not, take the loan at that point to pay off your federal loans and pay him back instead. There would be some accrued interest over your time in school, but I would say that's worth it as a reasonable balance.Tempo wrote:My grandfather recently offered to loan me the extra 150k I need for law school, and he wouldn't charge me interest. Would this be worth doing if I don't know what kind of law I want to practice? If I took out federal loans, then I would have a chance of LRAP. If I do this, then I won't be able to have my loans forgiven or paid off. What do people think?
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- Nagster5
- Posts: 764
- Joined: Tue Jul 28, 2015 11:28 am
Re: Taking out a non-interest loan?
Better option would be to take the loan and stick it in a 2/3 year CD (or have him do that for you b/c taxes). Same flexibility to just pay it back if you go PI and the interest will be negligible with the gains from the CD.Tempo wrote:That's a very good idea. I'll talk to him about that, thanks.Holodigm wrote:Propose this to your grandfather - table the 150k offer for three years. Do your time in school, and if you pursue an LRAP eligible career, then decline the loan. If not, take the loan at that point to pay off your federal loans and pay him back instead. There would be some accrued interest over your time in school, but I would say that's worth it as a reasonable balance.Tempo wrote:My grandfather recently offered to loan me the extra 150k I need for law school, and he wouldn't charge me interest. Would this be worth doing if I don't know what kind of law I want to practice? If I took out federal loans, then I would have a chance of LRAP. If I do this, then I won't be able to have my loans forgiven or paid off. What do people think?
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- Posts: 55
- Joined: Fri Mar 04, 2016 4:43 pm
Re: Taking out a non-interest loan?
I like this idea, but CD rates are still abysmal; a 1% return (if you're lucky) won't do much stacked against APRs of 5 or 6%. Maybe consult a financial adviser. But nagster's got the right idea.Nagster5 wrote:Better option would be to take the loan and stick it in a 2/3 year CD (or have him do that for you b/c taxes). Same flexibility to just pay it back if you go PI and the interest will be negligible with the gains from the CD.Tempo wrote:That's a very good idea. I'll talk to him about that, thanks.Holodigm wrote:Propose this to your grandfather - table the 150k offer for three years. Do your time in school, and if you pursue an LRAP eligible career, then decline the loan. If not, take the loan at that point to pay off your federal loans and pay him back instead. There would be some accrued interest over your time in school, but I would say that's worth it as a reasonable balance.Tempo wrote:My grandfather recently offered to loan me the extra 150k I need for law school, and he wouldn't charge me interest. Would this be worth doing if I don't know what kind of law I want to practice? If I took out federal loans, then I would have a chance of LRAP. If I do this, then I won't be able to have my loans forgiven or paid off. What do people think?
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- Posts: 11730
- Joined: Tue Sep 04, 2012 9:53 am
Re: Taking out a non-interest loan?
Is this one of those "wink, wink" things where you won't really have to pay off the loan in the end or will you actually have to pay it off? Like, would you be paying it to his estate or something if he passed away?
- Tempo
- Posts: 96
- Joined: Wed Jan 06, 2016 9:54 pm
Re: Taking out a non-interest loan?
That's a good question, but I'm treating this as a real loan that I would have to pay off.BigZuck wrote:Is this one of those "wink, wink" things where you won't really have to pay off the loan in the end or will you actually have to pay it off? Like, would you be paying it to his estate or something if he passed away?
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Re: Taking out a non-interest loan?
Another plus in the maybe-take-it-after-three-years is the (admittedly very slim) chance that you get seriously ill or die or something,
This is not a significant concern, but a small plus that the family gets the federal loans forgiven (not sure about serious illness, I have different loans than US federal ones)
This is not a significant concern, but a small plus that the family gets the federal loans forgiven (not sure about serious illness, I have different loans than US federal ones)