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I am thinking about taking out a private loan to pay for college. How do they do it though? So far I know I can't take out more than the gap I have between the money I get from financial aid and the actual cost of attendance.
Let's say cost of attendance is 30 k and I get 20 k from the govt. That leaves a balance of 10 k I could take out.
Do I have to take it out every semester again? That would mean they place a hard inquiry each time I get the loan and each time I gotta apply again. That would kinda screw my credit.
I doubt you'll get 20k in gov't loan. pretty sure federal unsubsidized and subsidized Stafford loans maxes out at $10,500 for independent sophmore students. expect less if you are a freshman or dependent student (wasn't sure if this was just a random example or if you got that actual number from somewhere).
not sure what you mean by "do they take it out every semester". AFAIK, it's a 1x/year deal that paid out per semester.
I visit another forum at times that goes into a lot of details regarding student loans and credit issues. it seems like 90% of the people who post horror stories about student loans took out private loans. everything I've heard about them state that they are far less forgiving than gov't loans when it comes to deferment. I'd still say avoid them like the plague (you may not have much of a choice; private loans are slim pickings these days anyways) and try to exhaust all other options. if you still wish to proceed, I'd suggest checking out the creditboard forums, which has a separate student loan forum
Well, I got about 8 500 Dollars per Semester. Yeah, it's not all loans, but about 6k each semester. I'm in Engineering and I found it hard to work and go to school full time. I need more time to study. The cost of attendance is usually something about 30k per year. So I could take out about 15k. Cost of attendance includes everything and not just the tuition.
So, I would apply ONCE every year? And then they pay it out each semester? I am not sure yet what I will do, but I think I will have to consider it.
It has a disclaimer pretty much saying they went broke and to another bank.
As has been said, exhaust federal loans first. Including unsub. Although, they may have already done that at the finaid office. The private loans are "last resort." They have higher interest rates on average and require good credit (parental cosigner most likely). Also, cut as much from your budget as possible. Is off campus living possible? Maybe at home? Ask questions like these to refine your costs.
No, I don't live with my parents anymore and it's not an option. I actually heard that if you have excellent/good credit you might not need a co-signer.
I actually heard that if you have excellent/good credit you might not need a co-signer.
That use to the case, not so much anymore. Investors are not interested in buying the associated debt anymore (Banks, were never particularly interested in making these crap loans with their own money). This is not to mention that someone that is young is not going to have "excellent credit".
That use to the case, not so much anymore. Investors are not interested in buying the associated debt anymore (Banks, were never particularly interested in making these crap loans with their own money). This is not to mention that someone that is young is not going to have "excellent credit".
$30k/year is rather expensive.
Well, yes.. I do have excellent credit. Why crap loan? I thought it was one of the safest loans they had cause people are more likely to pay student loans back? Since you can't even get rid of it if you file for bankcrupcy
The 30k includes EVERYTHING per year.. The actual tuition is maybe 4k per semester. But If you take out a student loan it can't be more than that ( minus federal aid ).
What is your credit score? Its hard to get an "excellent" credit score unless you have a 10+ year credit history.
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Originally Posted by XodoX
Why crap loan? I thought it was one of the safest loans they had cause people are more likely to pay student loans back? Since you can't even get rid of it if you file for bankcrupcy
Private student loans in bankruptcy is not as cut as dry as federal student loans. They can be discharged under a variety of circumstances.
They are crap because their default rates are high, investors are not interested unless their are getting a large coupon on the associated securities.
Quote:
Originally Posted by XodoX
The 30k includes EVERYTHING per year.. The actual tuition is maybe 4k per semester.
22k/year for living costs is rather high. If you borrowed all of this you'd have $120k in debt when you graduate. That is rather high...
Wait, you have a 750+ and you're STARTING college? Are you 18? I'm 21 and have a 670 which is considered excellent at my age because I just started using credit at 18.
As for how much banks like these loans, they like giving them to people with good credit. Sure, you can't bankrupt them unless you're pretty much medically unable to pay them (we're talking like falling off a building and becoming paralyzed from the neck down with no other income besides SS or something in that range that prevents payback), but there's also nothing physical to back them up that they can take away. It doesn't matter if someone can't bankrupt the loan if they still refuse payments, ya know? The bank still isn't getting it's money.
I also see you'll be an engineering major. Some banks take major into account for future jobs and future salaries, and engineering is the higher paid degrees. That may help you get a private loan.
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22k/year for living costs is rather high. If you borrowed all of this you'd have $120k in debt when you graduate. That is rather high...
Seems high, but isn't unheard of. The big 10/large midwestern schools, for example, are known for charging exorbitant tuition and fees (UMich, UIUC, etc.).
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