I need a private loan for tuition/books. How?

Paying for College
1

<p>I have a list of lenders to choose from, but what now? The disclosures are really uninformative since the starting interest rate is around 2-12% for all of them. The maximum interest rate is either unlimited or 25%+ anyway, so I hope to never expect it to get even to the limited 25%, much less an unlimited amount higher than that...</p>

<p>I did find this:
FinAid</a> | Calculators | Loan Discount Analyzer</p>

<p>Should I try to make an appointment with a rep from each lender and just go down that analyzer list and fill in the blanks?</p>

<p>I'm really lost here..</p>

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<p>This is not directed at the OP per se - but is there a way to create a “Private Loans” sticky with some good information, including some words of wisdom on some basic “borrowers beware” guidelines?</p>

<p>To the OP: how much are you attempting to borrow through a private loan? Have you figured out what your personal maximum that you are willing to take out for all your education needs?</p>

<p>As for “hoping” for an interest to not get to 25% – you better be darn tootin’ certain what would trigger those higher rates and in what circumstances it could go higher. If you can’t ascertain those details do not take out the loan!</p>

3

<p>How much do you need to borrow? Are you a young person without much income/assets?</p>

<p>If so, I doubt anyone is going to lend you much (if any) money.</p>

<p>Did you already take out the max federal student loans?</p>

<p>Are you an incoming freshmen?</p>

4

<p>Agree with a student private loan sticky. There should be two. One for with a co-signer and one without a co-signer.</p>

<p>To the OP. How much left do you need to borrow and would you have a co-signer? And there’s a difference between a private loan and a student private loan. The private one is impossible and the student one, you need it to go through with the school and there’s a max cap you can borrow which is COA minus financial aid package. I’m assuming you’ve already accepted everything on the awards package. Also you shouldn’t go with the school COA since they calculate the max. You might don’t need to borrow that much or not at all.</p>

<p>And if you only need money for books, some school have short-term and emergency loans that are 30-day loans . Max amount varies by school and I’m assuming about 1k and loan repayment varies. My old school was a month which for a working students is just enough. I’ve never taken them out before so I don’t know the interest rate but once again it would vary between school.</p>

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<p>Thanks for the responses!</p>

<p>I need ~$7k for the 2010-2011 year, and yes, it is a student loan that will be verified by the university. I also will hopefully have a cosigner. I’m 21, a junior this year, and my income is minimal (~$5k/year), but I am officially employed. I already have accepted both the full subsidized and unsubsidized Stafford loans.</p>

<p>The emergency loan probably wouldn’t be a good choice, because I’m not expecting to have very much time to work. The only time I would have to fit work in is on the weekends, and adding that sounds like it would make for a killer schedule. The income I do make is supposed to be for living expenses.</p>

<p>So if everyone agrees that I truly am in need of a private (student) loan, will anyone help me with my original question? ;)</p>

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<p>If you have a parent co-signer, then you can get a Sallie Mae loan. If the co-signer is someone else, then you can go with someone else.</p>

<p>If you have more years of college to come, this problem is going to repeat. Who will co-sign next time? And the time after that? Keep in mind that your co-signer’s credit is hurt while the loan is outstanding (even if it’s current), so the same co-signer may not qualify in future years.</p>

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<p>I wouldn’t go with Sallie Mae… but that’s just me.</p>

<p>What State are you from and what State are you schooling in?</p>

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<p>Interesting responses… Is it not extremely common for students to need private student loans? Of course this “problem” is going to repeat. How many students actually have jobs that pay enough to afford the costs of college?</p>

<p>Anyway, a parent would be the cosigner, and I both live in and will be attending school in Oklahoma.</p>

<p>mom2collegekids, why do you recommend Sallie Mae over other lenders?</p>

<p>endof18, what about Sallie Mae don’t you like?</p>

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<p>I don’t think it’s extremely common for kids to have private loans. Most young people don’t earn enough money after they graduate to pay back both federal student loans AND private loans. </p>

<p>How many students actually have jobs that pay enough to afford the costs of college?</p>

<p>Some kids commute to their local public and pay for their tuition from a federal loan and a part time job.</p>

<p>Some kids have parents who help them pay for college.</p>

<p>Some kids go to schools with great scholarships or financial aid.</p>

<p>I recommended Sallie Mae since it’s relatively easy. For those who’ve heard “bad things” about Sallie Mae, that’s not really from the student’s standpoint. it’s because of some bank failures and gov’t bailouts. That doesn’t affect the borrower except for some changes in procedures. .</p>

<p>How much will you have borrowed from fed student loans by graduation?</p>

<p>how much will you have borrowed from private loans by graduation?</p>

<p>So, how much total will you have borrowed?</p>

<p>What is your likely job after you graduate?</p>

<p>How much will you likely be earning?</p>

<p>Will you be living at home after you graduate or will you have to pay for your living expenses while also paying back your loans?</p>

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<p>My estimates upon graduation are:
$13,750 federal subsidized,
$5,000 federal unsubsidized,
$17,500 private</p>

<p>I have no idea what job I might have when I graduate or if I’ll continue on to grad school or med school, but if it came down to having the same job I do now, I’ll be earning ~$10/hour. If I had no other choice, I could live with my parents until my loans were paid down to a manageable amount.</p>

<p>I appreciate the important questions to ask before deciding to take out private loans, but there really is NO other option for me.</p>

<p>I’m not sure I’ll go with a lender simply because they’re easy! :stuck_out_tongue: As you can see from the link I gave in the OP, there are a bunch of variables to consider over straight convenience.</p>

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<p>gotakun, I’ve noticed over the years that when people (not just students) say “I have no choice,” what they really mean is, “I really don’t want to defend this choice.” </p>

<p>You do have other options. You could take a leave of absence for a semester and work as many hours as you can, save most of what you earn, and return to school in the spring. Another option is to drop to part-time so you can work more hours while attending school. </p>

<p>it’s not what you want to hear, but those both make more financial sense than venturing into a poorly-regulated private loan market, especially since you don’t expect to be a high earner as soon as you graduate and your debt load is already high. The rates charged by private lenders would have been illegal under usury laws not too long ago, and their rates and terms may be illegal again in the future. It’s not a good time to be borrowing in this market.</p>

<p>If you feel you must borrow (and add to your debt load), t’s possible that you could get more federal loans if your parents apply for a federal PLUS loan and are denied. Your college financial aid office can help you with this. In this situation, the student is allowed to borrow an extra $4k unsubsidized. </p>

<p>If you leave the federal student loan world and start taking out private loans, you will have fewer consumer protections, no ability to reduce payments on those loans based on low income, and missed payments can lead to big penalties (multiples of the original loan amount) that can’t be discharged even in bankruptcy.</p>

<p>Check this article on “The Education Bubble” to see why private loans are not as effortless and easygoing as you think: [The</a> Education Bubble | WBUR](<a href=“http://www.wbur.org/specials/education-bubble]The”>http://www.wbur.org/specials/education-bubble). </p>

<p>Or check this recent New York Times article on the burden of student loans in a grim job market (which may not have improved much by the time you graduate: <a href=“http://www.nytimes.com/2009/04/18/your-money/student-loans/18student.html?emc=eta1[/url]”>http://www.nytimes.com/2009/04/18/your-money/student-loans/18student.html?emc=eta1&lt;/a&gt;&lt;/p&gt;

<p>Or search Youtube to find a powerful 5-minute excerpt from “Default: The Student Loan Documentary”.</p>

<p>Taking out private student loans is a big step with potentially very big consequences. It’s a choice, not a necessity.</p>

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<p>Just during my loan search and research, I’ve come upon articles about Sallie Mae and the heat they got. But it’s just me and I’m sure every other lenders have dirt on their hand.
Don’t let me stop you from considering them.</p>

<p>You wouldn’t know the interest rates you’ll get until after you apply and get approved for. That’s why it was so hard for me to know where to apply to get the best interest rate and probably why so many people post that questions on this forum, including me when I first came here. I wanted to know which lender would give me the best interest rate for my score and there’s no way to find that out sadly.</p>

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<p>Instead of continuing to defend my need for a private loan, I’m going to ask again that people PLEASE address the questions in the OP! I do appreciate everyone’s concern, so thank you.</p>

<p>And thank you, endof18, for the on-topic feedback about your own experience asking this question. I’m interested in more than just interest rates. Just take a look at the link in the OP to see what all that calculator considers. I’m sure there are more things to consider in addition to that as well, which is exactly what I’m trying to find out by asking here.</p>

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<p>Lol it makes me laugh how every time someone asks a question about private loan the hoards of parents suggesting against it pop up. OP already made his college decision obviously just help him</p>

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<p>I have a list of lenders to choose from, but what now? The disclosures are really uninformative since the starting interest rate is around 2-12% for all of them. The maximum interest rate is either unlimited or 25%+ anyway, so I hope to never expect it to get even to the limited 25%, much less an unlimited amount higher than that…</p>

<p>With an income of less than $5,000 how can you afford to pay interest?
Wouldn’t your time be better spent find how to reduce costs?</p>

<p>*I did find this:
FinAid | Calculators | Loan Discount Analyzer</p>

<p>Should I try to make an appointment with a rep from each lender and just go down that analyzer list and fill in the blanks?*</p>

<p>YOu could- note origination fees- and you will need to get a new loan every year while paying on the unsubsidized ones ( or having your interest compounded)</p>

<p>Speaking of interest- why if your income is so low- you don’t have your whole Stafford loan subsidized? You also should be eligible for a Perkins loan.</p>

<p>What year are you in college?
What about work study?
Aren’t you eligible for any grants/cutting housing expenses by being a RA?</p>

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<p>It always amuses when people come on here, ask a question, and then when they are given advice they don’t want to hear, get snippy and ask everyone to get back on topic. What people are telling you, OP, is that there is no point in answer the questions in your OP because you are making a potentially bad decision.</p>

<p>To answer your question though - assuming that you are even able to get a private loan - most students I know chose by going to the lender’s websites and comparing the terms of their loans, including reduced interest rates for paying on time and other such perks.</p>

<p>Interest rates are tied to the market - variables ones, anyway. They go up and down with the market rate. Lenders that have the lowest rates now could have the highest rates in 5 years. I don’t know how long your list of lenders is, but it may take a long time to make an appointment with each rep. What kind of information do you feel like you need, that you can’t find on the lenders’ websites, that you will glean from a convo with a rep?</p>

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<p>My estimates upon graduation are:
$13,750 federal subsidized,
$5,000 federal unsubsidized,
$17,500 private</p>

<p>Why aren’t you borrowing the max for federal loans? According to your numbers, you’ll only be borrowing up to $18,750. You can borrow up to about $27,000 with federal Direct loans.</p>

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<p>“Lenders that have the lowest rates now could have the highest rates in 5 years.”
That’s the scary part.</p>

<p>Good catch mom2collegekids. You should max out your feds first.</p>

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<p>@emeraldkity4
MY income is less than $5k, and that’s because I’m only working over the summer. That would go up if I graduated and continued at my current job. My household income is much higher (around the $100k range), but my parents have no savings and a high debt load themselves, so there isn’t any money for me. I don’t know how I could spend my time reducing costs. What do you mean exactly? I’m a junior this coming semester and my school ran out of work study, so not many got that opportunity unfortunately. :frowning: On the RA matter, I’m not sure, but I am a transfer student so I don’t know if I am even eligible to be an RA (and the positions are surely taken by now).</p>

<p>@juillet
I skimmed the websites of the lenders and didn’t see any information at all. My school’s website actually listed disclosures from a few of them, but those were very basic. It looked like the only way to get information I’m looking for was to go through the process of getting the loan (by making an appointment with a rep). Here’s an example of a website I looked at:
[Private</a> Loan Options for Undergraduate and Graduate Students - Apply Online for a Private Student Loan from Edamerica - Edamerica](<a href=“http://www.edamerica.net/applyforaloan/privatestudentloans.aspx]Private”>http://www.edamerica.net/applyforaloan/privatestudentloans.aspx)</p>

<p>Edit:
@mom2collegekids
As far as I know, I have the max allowed for me. That’s what was awarded to me in my financial aid summary from every school I applied to.</p>

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<p>^The OP said he had accepted the max loans for this year…as a junior. My guess is that he did not need the max loans in years 1 and 2 and cannot access the full amount now.</p>

<p>OP, you may find better info by talking with your school about private lenders and asking for their suggestions. What’s best for your situation may not be what’s best for other people. One poster recently commented that her school was able to direct her to a lender that was willing to work with her although she had no cosigner and little income. Hopefully you will too.</p>