Different types of Loans and Credit Score

[Labkid]

I have been looking around at what the interest rates generally are for med school loans and what their caps are. What I have been wondering is what are typically the best places to get loans from? I've heard of the Stafford loans but that they have high interest rates, and was wondering if maybe getting a loan from a bank is a better way to go about it?

Also I do have pretty good credit but I've never had to take a loan. Can someone explain to me typically how it works with your credit when you do get a loan? I've heard you have to take a "hit" to your score but no one I know can explain it in a meaningful manner.

Lastly is there a way to narrow down what places would and wouldn't give me a loan based on my credit score or do I just have to talk to them, allow them to check my score (which I understand lowers your score), and then compare it to other loans I've been offered?

Thank for all the help.

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[Holmwood]

I have been looking around at what the interest rates generally are for med school loans and what their caps are. What I have been wondering is what are typically the best places to get loans from? I've heard of the Stafford loans but that they have high interest rates, and was wondering if maybe getting a loan from a bank is a better way to go about it?

Also I do have pretty good credit but I've never had to take a loan. Can someone explain to me typically how it works with your credit when you do get a loan? I've heard you have to take a "hit" to your score but no one I know can explain it in a meaningful manner.

Lastly is there a way to narrow down what places would and wouldn't give me a loan based on my credit score or do I just have to talk to them, allow them to check my score (which I understand lowers your score), and then compare it to other loans I've been offered?

Thank for all the help.

http://www.simpletuition.com/student-loans/no-credit-check/

 

[darkjedi]

don't ever take out private loans for med school, it is just an all around bad idea

 

[Osteoth]

So what types of loans do most people take out? Specifically middle-class people who are unlikely to get heaps of grants/free money?

 

[darkjedi]

So what types of loans do most people take out? Specifically middle-class people who are unlikely to get heaps of grants/free money?

all federal, they will cover up to total cost of attendance

 

[HM1 Justin]

You can apply for the Navy's Health Professions Scholarship. It covers 100% of tuition and pays a stipend around 2,100 every month while in med school.

 

[NickNaylor]

all federal, they will cover up to total cost of attendance

Unless you go to a very expensive school. There's an annual limit for Stafford loans. At one school I was looking at, even with max federal loans there was still a not significant gap between COA and my financial aid reward that I was expected to cover.

 

[darkjedi]

Unless you go to a very expensive school. There's an annual limit for Stafford loans. At one school I was looking at, even with max federal loans there was still a not significant gap between COA and my financial aid reward that I was expected to cover.

If you go over the limit of your Stafford loan, there are still GradPLUS loans available, which allow you to take up to your school's reported cost of attendance. They have the same benefits as Stafford loans do, in that they qualify for deferment/forbearance as well as income based repayment/pay as you earn. Additionally, if you plan to do a long residency, or work in academics/faculty at a hospital, there's a good chance that a portion of your loan could be forgiven after 10 years under the public service loan forgiveness program.

 

[carparker]

If you go over the limit of your Stafford loan, there are still GradPLUS loans available, which allow you to take up to your school's reported cost of attendance. They have the same benefits as Stafford loans do, in that they qualify for deferment/forbearance as well as income based repayment/pay as you earn. Additionally, if you plan to do a long residency, or work in academics/faculty at a hospital, there's a good chance that a portion of your loan could be forgiven after 10 years under the public service loan forgiveness program.

The annual Stafford limits are quite low at $40,500. My state schools are both around $35,000 just for tuition at the in-state rate. Even in a low cost-of-living area, unless you're living with your parents, you're looking to add at least $15,000 to that each year to cover living expenses. GradPLUS loans require excellent credit as well as an actual credit history, so most people will need a cosigner.

 

[darkjedi]

The annual Stafford limits are quite low at $40,500. My state schools are both around $35,000 just for tuition at the in-state rate. Even in a low cost-of-living area, unless you're living with your parents, you're looking to add at least $15,000 to that each year to cover living expenses. GradPLUS loans require excellent credit as well as an actual credit history, so most people will need a cosigner.

It doesn't have to be excellent, just not adverse, i.e. history of bankruptcy. Even if you do have an adverse credit history, you just need a co-signer.

If you do have bad credit, then it's an even worse idea to try and take out a private loan since the interest rates would be through the roof.

 

[Labkid]

Thanks for the info guys, much appreciated