<p>So I have to take out a private student loan. I'm OOS going to PSU. I received a $5,500 fed loan for the first year. I will need another $35,000.</p>
<p>When I take out a private student loan, do I take it all out at once (for 4 years) or do I do it one year at a time?</p>
<p>If you are going to be a traditional freshman (late teens, etc.) it is highly unlikely that you, alone, will be able to take out private loans. Regardless $140,000 worth of loans for undergraduate ($35,000 a year for four years) is far to much debt to get yourself into. Hopefully you have some other choices with regard to college and the financing. Have you discussed college financing with your parents. If you an independent adult…$140,000 is still alot of debt for a college education!</p>
<p>I have the same question!</p>
<p>I will have a co-signer, momofthree.</p>
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<p>All that means is that if you are late to a payment or default, it will affect the co-signer’s credit and they may be forced to pay in your stead.</p>
<p>Can someone just answer my original question? “When I take out a private student loan, do I take it all out at once (for 4 years) or do I do it one year at a time?”</p>
<p>Discuss it with the person(s) that will be consigning. The risk is that your co-signer is approved the first year, but what happens if you all go back for additional loans the second year or third year and are turned down? Each time they/you take a loan out, the debt to asset ratio and credit worthiness will be analyzed and a decision will be made. It could also depend on how your cosigners and you are financing (home equity, new mortgage, consumer loan, etc.) I doubt anyone on the forum could tell you what is correct in this situation…you need to discuss with parents or co-signers. It is alot of money you are asking about.</p>
<p>Thank you. Another question, would a PLUS loan be a better idea?</p>
<p>Only your parents or legal guardian can take out PLUS loans for you. They cannot (as I sadly figured out) ever have the debt transferred to you, or rolled in with your other loans. There is still a credit check, and you can only take out the COA - the finaid package. The interest rates are probably better. Payment can start right away, or your parents can way to start paying the PLUS until after you graduate (with accumulated interest.)</p>
<p>You take out new loans every year.</p>
<p>…If you can afford the $35,000 but not all at once, I would not recommend a loan. Try to research the school’s payment plan options, which generally have no interest.</p>
<p>True Yurtle but goodness $35,000 is a ton of cash…multipled by 4 years. Even if you go on a payment plan it could be $3-4,000 a month depending on whether it’s dolled out over 8 months or 12 months. If you afford to swing your money like that out of income or savings you probably have pretty good cash flow and probably don’t need loans to begin with.</p>
<p>Which is why I said “if they could afford it.” (If their parents are making 135k or so, they could probably swing the 35k, just not in a lump sum.)</p>
<p>If they can’t afford it, it’s far too much; but that’s already been pointed out. (Hell, my private loan amount has been determined “insane” at only 9k in private loan debt after a year, soo…)</p>
<p>My parents don’t mind the PLUS loan being in their name. My mom has 40k that she can give me. But, it’s our LAST resort and the payment plan seems too “harsh” if it’s gonna be 3k a month.</p>
<p>There is a “modest” credit check for PLUS loans. It is still a loan, after all. I don’t know what the payment plan will actually be.</p>
<p>I guess we will try that first. Thanks for the help. =)</p>
<p>Even if you get shot down for the Plus loans, simply not getting the Plus loans qualifies you for some more unsubsidized Stafford money.</p>