<p>One reason for the mortgage crisis was people went for ARM’s so that you could buy a bigger house then afford based on a fixed rate loan and no one thought rates could go higher. When the rates went up, many could not afford the loan payments any more and you know the rest of the story. </p>
<p>It is is exactly the same issue here. Private loans are like ARM’s (adjustable rate mortgage), yes they are very low today, they were not low a few years back and will not be low few years from now. Does that mean you should not take an adjustable loan? NO, it depends on the circumstances.</p>
<p>If the loan is small and the earnings potential suggest that it could paid off in a short period of time, an adjustable may be better. If you expect that 5 years from now you will still have a loan, then it may not be better.</p>
<p>Again, I think this one size fits all statements are not correct. Each person needs to weigh their situation and determine what makes most sense under their circumstances. It is an educated guess, and one person’s choice may not be right for the person next door.</p>