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How do loans work?

Discussion in 'Pre-Dental' started by montag925, Jan 2, 2009.

  1. montag925

    2+ Year Member

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    Like many other people, I will be taking $200k+ in loans to pay for my education. However, I reached the point where I need to know a little more about what I am doing. I have a brother who recently graduated medcial school who took out different loans at different % interests (from 3 to 8). I am wondering exactly how this all works. I know government loans are taken out to a specific amount of money with minimal interest while private loans tack on more. Also, what is this 30 year plan that some people are on and what are the benefits/drawbacks of it. My brother tends to be very finicky with his money and always complains about being in debt. If someone could respond with an idiots guide to dental school loans, or a link to a recent thread, it would be much appreciated. thank you.

    -also, do loans accumulate interest in while in dental school?
     
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  3. notin

    2+ Year Member

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    wat

    also, op your loans except for the subsidized government loans which you may be eligible for will accumulate interest while you're in school. i'm not sure about the rest of your questions, i'm also curious.
     
  4. daisy25

    7+ Year Member

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    it depends on what loans you are thinking about taking

    1) subsidize government loans: government loans that do not acrue interest while you are in school. Interest starts when you graduate. usually they let you take out $8,500 per year and there is a cap for total that you can take out, not sure what that number is. You do not pay this loan until you graduate.

    2) unsubsidize government loans: government loans that interest acrues while you are in school. you can take out $30,000 a year and there is a cap on the total amount you can take out over the years. you do not have to pay this loan until you graduate.

    3) Grad plus loan: when you are in a graduate program, and max out on the amount of subsidize and unsubsidize. Not too sure about this one.

    4) Perkins loans: not to sure about this

    5) private loans: generally the interest rates are higher and you have to pay this back depending on the contract you sign. some make you pay back right away, some may let you wait until you graduate. but you will not be able to consolidate this loan. read the fine lines with this type of loan.


    You need to becareful with the amount of loans you take out per year because it will all add up, and you do not want to max out on the total cap of government based loans (since these loans have lower interest rates). Some people in grad school run into these situations. Also, for all of these loans, the school has to provide documentation via the financial aid office to prove that you need these loans.

    Hope this helps!
     
  5. lopkiu

    5+ Year Member

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    I checked with FA office
    Don't hope too much for Perkin, it seem dental student rarely get any from them. It was replaced by a health profession loan.
    But other than the the sub stafford loan, all other loan you will be paying interest on them ranging from 5%(health profession) to 6.8%(unsub Stafford), u have the option of paying the interest while to at school or wait till u graduate but the interest will add up at the end.
    So far this is my only understanding. Plz correct me if i am wrong or if there is a lower rate loan plz tell me
     
  6. JTSLai

    5+ Year Member

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    also keep in mind that even though loans say that you dont have to start paying them back until after you've graduated, the vast majority of them still accumulate interest during your four years of school so take that into consideration when you weigh different loans and try to determine how much you will actually need. the less you need to take out the better.
     

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