<p>...should I keep money leftover from my first semester's loan for next semester or send it back to the bank?</p>
<p>I'm sorry but I have little understanding of macroeconomics, when I try to predict the whole system confuses me.</p>
<p>For my first semester I took out a private loan of around $8K from Chase (The rest covered in scholarships and Stafford loans). I thought Chase would split it up and send me the second half later in the year for next semester but they sent the entire thing for the first semester. So I deposited it in my Chase checking account and used a bit more than half of it, knowing I could send back the extra amount later so I wouldn't have to pay interest for the extra money. Well I've been lazy on that but there's still time for me to send it back, about a month before I need to reapply for the next loan haha.</p>
<p>I'm just confused on all the factors of this decision to either send back the money now and take out a new $5K loan in a month or keep the money and take a smaller $1-2K loan. I'm not sure if I sent it back that I also wouldn't have to pay the interest for that extra money that I've had for a couple of months. Or if any of this even matters.</p>
<p>The main factor that I've thought up (can't remember the others!):
If Chase follows other banks in going bankrupt and what effect would this have on my checking account of $4-5K? The effect on my $8K loan and its interest rate? The effect on my ability to be accepted for a new loan? Or, a more mild scenario, if the interest rates simply fell or raised, what would hurt me less, more money in the bank or more in debt?</p>
<p>If this needs more information to answer just let me know, I mean my credit history is average and to my knowledge my parent's credit history is decent (my dad cosigned my last loan), but would I possibly be denied a $5K loan in these times over a $1-2K loan?</p>
<p>No point in sending it back to have to reapply in a few weeks (just so you know you've probably being accruing interest on the full amount of the loan disbursed to you). </p>
<p>If your bank goes bankrupt, you still owe the money (but might have a harder time getting more money out of that bank).</p>
<p>
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So I deposited it in my Chase checking account and used a bit more than half of it, knowing I could send back the extra amount later so I wouldn't have to pay interest for the extra money.
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You are probably started accruing the interest on the loan the moment they wrote the check. If you didn't want to accrue interest on the part of the loan you did not need you should have sent it back immediately. You have had the money for months - what made you think they would let you have it interest free?</p>
<p>Agree with sue that there is little point returning it now. It is unusual for them to sent the whole years money at one time (well my kids have only had Stafford loans so it may be different with private loans). You may want to check that there is not a mix up and they are not planning to send you another $8k for the 2nd semester.</p>
<p>If they go bankrupt it would not affect the money already in your checking account as they already paid it to you and you cashed it. The interest rate you have for this $8k was probably fixed at the time you took out the loan so should not change.</p>
<p>Honestly it sounds like you need to thoroughly reread the terms of the loan. Everything should be explained in there. If you do not understand the terms (which you should make sure you do before you sign anything in the future) then come back here and ask.</p>
<p>you applied for an 8k private loan??? if that is the case then you will get that all at one point and it is up to you to apply what you need to each semester - now it is nearly impossible to get a loan for students - i have a credit score of 740 - i'm 20 and i couldn't get one for just 2k - so that way i wouldn't have to make my parents pay for anything this year.... but if you must take loans - take it all out at the start of the year and just hold onto it... there is no point in taking two out, it just lowers your credit score since i assume you are not making payments on it till after graduation.</p>
<p>the way loans work - as with how the markets crashed - they make all these loans, then bundle them together in lumps of thousands and sell them off to a holding comapny - so chase really has little to do with the loan since they sold it and are mainly the middle man charging interest. if they go bankrupt... which i assume they wont... you are still liable since the loans they control would be sold off at firesale prices to pay off the debt they owe - mainly to private investors or the US gov't after this redic bailout.</p>
<p>Okay thanks I'm getting more of the picture now. Sweet actually then I don't think I'll have to take out another loan at all this semester.
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If you didn't want to accrue interest on the part of the loan you did not need you should have sent it back immediately. You have had the money for months - what made you think they would let you have it interest free?
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Yeah I meant to send it back immediately... it was just foolish of me to think I would have time for everything in my first semester of college ha.</p>
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if that is the case then you will get that all at one point and it is up to you to apply what you need to each semester
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Well my school's crappy financial aid office told me most banks split up the loans between semesters... :/</p>
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Honestly it sounds like you need to thoroughly reread the terms of the loan. Everything should be explained in there. If you do not understand the terms (which you should make sure you do before you sign anything in the future) then come back here and ask.
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Yeah I meant to do that but... come on... its in my file cabinet somewhere. =P</p>