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- Jul 8, 2017
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Looking to get some perspective on a GradPlus loan I'm thinking of taking out this year. I would greatly appreciate any feedback.
Normally, I only borrow only what I need. This year, due to the new lower 5.3% interest rate compared to last year's 7.08%, I was hoping to take out the maximum amount and use the excess to reduce my last year's GradPlus principal for an overall lower rate.
As far as numbers go: my last year's GradPlus loan is for $50,000. This year I have the potential to borrow upto $65,000 (only need $50k) for an excess of $15,000 that I can apply to my last year's loan. Logically, this makes sense to me and seems beneficial but I'm not really a financial-minded person so I can't see if I'm missing any caveats or hidden disadvantages. I was hoping if anyone sees anything wrong with this idea, they could elaborate on that.
I have contacted both my loan servicer and my school loan counselor for advice but they didn't really help. The loan servicer said I do have the option to target my principal from last year's loan for payments so that's cleared up. So I'm reaching out here to see if anyone can offer their two cents. Thank you for reading. Have a good one!
Normally, I only borrow only what I need. This year, due to the new lower 5.3% interest rate compared to last year's 7.08%, I was hoping to take out the maximum amount and use the excess to reduce my last year's GradPlus principal for an overall lower rate.
As far as numbers go: my last year's GradPlus loan is for $50,000. This year I have the potential to borrow upto $65,000 (only need $50k) for an excess of $15,000 that I can apply to my last year's loan. Logically, this makes sense to me and seems beneficial but I'm not really a financial-minded person so I can't see if I'm missing any caveats or hidden disadvantages. I was hoping if anyone sees anything wrong with this idea, they could elaborate on that.
I have contacted both my loan servicer and my school loan counselor for advice but they didn't really help. The loan servicer said I do have the option to target my principal from last year's loan for payments so that's cleared up. So I'm reaching out here to see if anyone can offer their two cents. Thank you for reading. Have a good one!