<p>So my question is should I not use the federal loans offered to me and just get a larger private loan with a pretty fair interest rate, or should I accept the federal loans as well as the private loan?</p>
<p>I got the federal perkins loan, federal unsubsidized loan, and federal subsidized loan. Each of those, obviously, have different interest rates and/or different times when interest begins to accumulate. </p>
<p>I was told that in some cases, having one loan from one lender is better than having multiple loans from different lenders because that way you will only have interest accumulating on one loan rather than on multiple loans. </p>
<p>I know that I could do all of the number-crunching, but I was just looking for general answers/advice. </p>
<p>If there is any information anyone would like to know, just let me know!!
Thanks in advance.</p>
<p>The subsidized loans (Perkins and Direct), there is no interest until you graduate or drop below half time enrollment. The Perkins loan also has no interest during the grace period (9 months after you graduate or drop below half time). I can’t imagine you would find any private loan that would have better terms than the first 4 years being interest free.</p>
<p>The unsub loan has some benefits - you can take it in your own name without needing a cosigner. Federal loans may also be cancelled in certain circumstances, such as your death or permanent disablement. </p>
<p>You can not get a loan in your own name without a cosigner with a good credit rating. As a student you have little or no income, and you probably have not got mch of a credit score. Private lenders will want someone with a good income/assets/credit score to cosign for the loan so that they can go after them in the event you are late or default on the loan or die.</p>
<p>
This is not really logical. The important thing about loans is the interest rate and the repayment terms. The interest will be accumulating on all the loan amounts. It is better to have a lower rate of interest accumulating on 5 different loans, than a higher interest rate accumulating on one. For instance, suppose yo have a $3500 sub direct, a $2500 Perkins and can get a private loan at say 6%. If you need 10,000 in total for year one, your interest in year one for the Perkins would be $0, for the sub loan it would be $0, and for the balance of $4,000 of the private loan it would be $240. So three loans, total interest $240. If you took ot the whole amount as one private loan, you would just have interest accumulating on one loan, but it would be $600 for the year. Obviously 3 loans would be better in this case.</p>
<p>It sounds like yo are considering taking out a lot of loans if you have Perkins, direct sub, direct unsub, and also need a private loan.</p>
<p>Swimcatsmom has some good advice there. Few students qualify for private loans without a cosigner with a good credit history. Usually that is a parent. Really, that is a double hit, since both student and parent are on the hook for that loan. That means both credit files have the loan reported and are counted against income and if any problems arise, both people can take the hit. That one loan can prevent you from getting a credit line and your parent from getting, say a refinance on the house, or a credit card while that debt is sitting there, not to mention making both of you have to take higher interest loans for all sorts of things such as automobiles, homes, etc. With the federal loans, the way it works, is that it is either you or your parent on the hook, not both of you. You with the Staffords and PErkins, your parent with the PLUS. Unless you and/or your parent have access to loans with far better terms than the federal ones, those are the ones that are the best bets. You, as a student , can’t beat the zero interest on the subsidized loans for the period you are in school. Also the terms for putting off loan payments for disasters is usually more generous with the federal loans. THe 4 "Ds’ that can sink you on loans are Death, Disablity, Dropping out and DIsaster. The federal loans end at death of the student and/or borrower. Not always the case with other options.</p>
<p>Thank you both for the advice. It’s obvious that I am a little confused on how all this works, so all of this was very good advice. I am more confident in my decision now.</p>