<p>ok, I plan on taking out a small private loan for college ($2,000) and the loan recommended by my school charges interest interest based on the 3-month LIBOR +3.3% with a cosigner. I have no clue how the LIBOR works but from my observations it is usually lower than the prime rate that most other loans are basing their interest rates on. Question is, is a LIBOR based loan a bad idea??</p>
<p>bump...???</p>
<p>Your first line of defense IF you have to borrower for college is to use Stafford loans first, then Parent PLUS loans second. The last resort is to have to use a private credit based loan because rates on those loans are higher, they are always variable and always going up and the loan repayment terms are usually not consumer friendly.</p>
<p>If you used up all you can in Stafford then try PLUS with your parents - if your parents don't qualify and get rejected you will get more money in Stafford unsubsidized loans. If your parents won't get a PLUS loan for you then you are stuck but just be really careful which program you use and try to really keep the amount you borrow low because as soon as you can that is the first loan you will want to payoff.</p>
<p>If you are going to grad school you can use a new program, GradPlus loan instead of a private or alternative loan - the Stafford, PLUS, GradPLus and Consolidation loans are all part of the federal program and their rates and terms are much easier on students than any other program.</p>
<p>check out <a href="http://www.ohiolendingworks.org%5B/url%5D">www.ohiolendingworks.org</a> - just to get an idea of the programs out there to help you.</p>