Grad PLUS Loan Vs. Private Loans?

[whiteorgo]

sorry if this is repetitive, but i wanted to ask about this. After taking out sub and unsub stafford loans for med school, lots of people turn to Grad PLUS loans (from what I learned...), but then how safer is it than private loans from bank? I wanted to know if med students take out lots of private loans or try to stay away from that just cause of varying interest? and if I were to apply for private loans, do i do that myself by contacting the banks or does schools do that as financial aid package?

i'm still little lost and you guys are always a great help. thanks alot!

---

Members don't see this ad.

 

[rbnsafsadgf]

what do you mean by safe? I don't understand what you are asking.

generally, grad plus loans are on much more favorable terms than private "alt" loans.

 

[TooMuchResearch]

what do you mean by safe? I don't understand what you are asking.

generally, grad plus loans are on much more favorable terms than private "alt" loans.

It really depends on the economy. The PLUS loans are fixed at 7.9%, but private loans tend to be variable. I had some private undergrad loans that started around 9% and are currently in the 4-5% range.

 

[teenmachinery1]

It really depends on the economy. The PLUS loans are fixed at 7.9%, but private loans tend to be variable. I had some private undergrad loans that started around 9% and are currently in the 4-5% range.

i wouldn't trust a private loan as far as I could throw one..

 

[swamprat]

It really depends on the economy. The PLUS loans are fixed at 7.9%, but private loans tend to be variable. I had some private undergrad loans that started around 9% and are currently in the 4-5% range.

I think its 8.1%.. i should know this i just applied for one. Medical education .. 🙄 Better pay off.

To OP: Good question, I'd assume you could get away with having a lower interest rate, but it could bounce around and go up (or down) and you probably couldn't defer. But what do I know, not much about it.

 

[TooMuchResearch]

i wouldn't trust a private loan as far as I could throw one..

Why?

 

[thesauce]

The grad plus loans are eligible for income-based repayment. Might be a life-saver during residency.

 

[whiteorgo]

what's a income based repayment? does private loans not have this?

 

[thesauce]

what's a income based repayment? does private loans not have this?

Income-based repayment (IBR) limits the amount you HAVE TO pay on your loans to 15% of how much you make above 150% of the poverty line. For the first 3 years of IBR, your interest on subsidized student loans (past what you're paying toward them) is forgiven. Only Stafford and Grad Plus loans qualify for this (I believe). Private loans do not.

In my case, through IBR I only have to pay $370-$400/mo toward student loans throughout residency.

I recommend reading this: http://www.aamc.org/programs/first/facts/incomebased.pdf

 

[johncalvin]

I think its 8.1%.. i should know this i just applied for one. Medical education .. 🙄 Better pay off.

...

I think the new health-care bill lowered GRAD Plus to 7.9%--but that may not take effect until 2014? I'm not too sure.