Private Loans

[Luxian]

How does one go about getting private loans?

My school is hella pricey (over $60k all told). While my federal loans and school loans and grants cover all of tuition, I'm still supposed to come up with $13k in living expenses. This is what they call "family contribution", but forgive me if I don't ask my 70-yr-old parents to squeeze their social security payments any harder for me. I'm taking this all upon myself.

So basically, now that I'm already got loans from the Feds and from my school, what next? Can I even get something that I don't have to start paying before my residency?

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[SketchLazy]

How does one go about getting private loans?

My school is hella pricey (over $60k all told). While my federal loans and school loans and grants cover all of tuition, I'm still supposed to come up with $13k in living expenses. This is what they call "family contribution", but forgive me if I don't ask my 70-yr-old parents to squeeze their social security payments any harder for me. I'm taking this all upon myself.

So basically, now that I'm already got loans from the Feds and from my school, what next? Can I even get something that I don't have to start paying before my residency?

Yes. If you have maxed out your Stafford and GradPLUS loans, there are private lenders who offer loans to cover your full cost of attendance (tuition + living expenses as estimated by the school). These loans usually have no origination and default fees, and can be deferred just like federal loans. You won't have to pay until you graduate. Covering the EFC is what these loans are especially made for, so you don't have to worry about getting the money to pay for the full cost of attendance. But you do have to be careful, because when it comes to private loans, all lenders are different. Shop around for the best interest rate you can get based on your co-signer's credit and your own. The interest rate will be based on either the Prime rate or the LIBOR rate and the lender will add on a certain percent which they call a margin. I would recommend getting a loan based on the LIBOR because it has shown less volatility than the Prime rate which has reached as high as 19% in the 70's and 80's. If they charge default or origination fees, they probably aren't worth it because so many other lenders don't when it comes to their private loans. Your school will probably have a specific relationship with certain lenders so you would have to choose the best lender from their list to take advantage of any special incentives. In short, find a lender with the lowest margin added to the LIBOR and no origination and default fees. Barring a long recession, these private loans will hurt you by the time you are paying them off. Consolidate if at all possible.

 

[Luxian]

Shop around for the best interest rate you can get based on your co-signer's credit and your own.

Co-signer? I've got very good credit, but I won't have an income in the next few years. Do I need a co-signer? I'm not married and I've been independent for 10 years now, so I'm not sure who I'd get.

 

[SketchLazy]

Co-signer? I've got very good credit, but I won't have an income in the next few years. Do I need a co-signer? I'm not married and I've been independent for 10 years now, so I'm not sure who I'd get.

You don't need a co-signer if you already have great/perfect credit. That was more directed towards those people straight out of undergraduate that haven't had time to establish credit on their own. A co-signer will always help lower your rate, because the sharks have someone else to feed on if you can't pay. But there is always the problem of your co-signer not trusting you to pay and getting on your case, so if you can avoid it, might as well.

 

[campusvitals]

without a cosigner? IF so with which company if you don't mind me asking? People I am talking to are having trouble getting private loans without cosigners even with STELLAR credit. (or collateral if you have cash or equity in a home.)