<p>I know the risks with private student loan and I should avoid them.
If I borrow from Sallie Mae for private student signature loan, I just want to know how much I will have to pay by the time I graduate.</p>
<p>Ex: $20,000. Variable interest rate.7.875% to 16.125% (LIBOR + 4.500% to LIBOR + 12.750%)
*Deferred payment until graduation.</p>
<p>At 10%. the interest would be ~2000 the first year and a little more for each of the next 3 years. You would owe a balance of close to $30000 after 4 years. Don't do it. ESPECIALLY if this only covers 1 year of school. </p>
<p>assuming you don't make any interest payments for 4 years while in school
20000 start
22000
24200
26620
29282 end</p>
<p>wow that's scary. Though, what would be the monthly payment be, then?</p>
<p>I would depend on what the repayment period was. And interest continues to accrue while you are paying off the loan</p>
<p>Making it really simple, if you just paid the 30K over 10 years w/o accruing any more interest, it would be $250 a month</p>
<p>30000/10/12=250</p>
<p>If you have a less expensive alternative, I would look into that. If your family can help you with the expenses of a costly college, or if you get great aid, that is one thing...but I don't ever advocate taking on large loans in excess of the amount of the Stafford loans.</p>
<p>Here is a loan calculator
FinAid</a> | Calculators | Loan Calculator</p>
<p>If you plug your debt and interest rate in and the number of years over which you will be repaying it it will tell you what your monthly payments will be. And the variable interest rate - any loan where there was even a possibility of an interest rate of 16% would make me run away very quickly.</p>
<p>As Sue said - if you are deferring the interest make sure you add it and compound it to see what your actual debt would be at the end of 4 years.</p>
<p>Cathode, </p>
<p>The numbers assume no deferments and punitive fees. It's an open secret that SMC derives much of its profits from these areas, to the extent that a recent company official admitted so in an internal document. Since 2001 they have admittedly increased fee revenue by an estimated 220%. It's not unknown given deferments, fees and such for companies like SMC to increase the initial loan amounts by one third or more. Additionally during deferments one tactic these companies use is to report such as defaults so they can collect the federal monies for bringing loans 'out of default'. Has been a cash bonanza for them, but very injurious to the credit of student borrowers. Because of these kinds of manipulations many who have dealt with this company have found they will never be able to repay under their current terms. That's one of the reasons the Canadian's recently re instituted bankruptcy protections for SL loans older than 9 years, they're trying to counteract the problems resultant from US loan companies, of this type, who've been operating internationally. </p>
<p>Quite truthfully you'd be better off waiting. There are some indications that there will be more federal direct loans coming into the system-simply because the costs of subsidizing companies such as SMC has run rampant. And even with the recent cash inflow to 'save liquidity' they are not financially stable (and their move into credit cards, health insurance etc is indicative of potentially massive over leveraging). They also wish to be included in the 700+ billion bailout. So not exactly the most stable entity to bring yourself into hock to...for the next 10 or more years. </p>
<p>Additionally there are upcoming exposes about the private/subsidized aspects of the student loan industry which may be very influential in cleaning up some of the abuses. Once these are published even the most serene (or paid off) public official will not be able to ignore the political consequences. Especially as the upcoming exposes will be published in mainstream books rather than in specialist press such as "The Chronicle of Higher Education" </p>
<p>Unless its absolutely essential you'd be much better off waiting for reforms than involving yourself with a private/sub loan at this time. Keep in mind that under current guidelines once you sign into these type of notes, you have virtually no consumer protections.</p>