Leftover money from loan.. what to do?

[dentwannabe]

I had a question. I'll be starting at d-school this fall and I was wondering what happends with the left over loan money. Do we simply "pay back" the loan before the interest accrues on it?

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[klfb80]

I had a question. I'll be starting at d-school this fall and I was wondering what happends with the left over loan money. Do we simply "pay back" the loan before the interest accrues on it?

The question doesn't quite make sense to me. Can you rephrase? Do you not need all the money to live off of so you will have some left over. If this is the case you could have reducued the amounts prior to taking the loans. Or just hold on to the money over the next 4 years in case you need it. If you don't need it pay it back at the end.

 

[UtahDDS]

You can repay the excess at any time. In fact, the sooner the better because interest will constantly be working against you. It is not smart to hang onto it if you think you can get by without it.

 

[dentwannabe]

You can repay the excess at any time. In fact, the sooner the better because interest will constantly be working against you. It is not smart to hang onto it if you think you can get by without it.

Yea, what I meant is, just in case I don't use all the "personal expense" loan they give me. When does the interest start accruing? Yearly? Monthly?

 

[LSR1979]

You can repay the excess at any time. In fact, the sooner the better because interest will constantly be working against you. It is not smart to hang onto it if you think you can get by without it.

this depends on what kind of loan it is. If it is subsidized money, then by all means hold onto it! The interest rate is so low, all you have to do is shove that money into a CD and you will actually be making money on borrowed money. Now unsubsidized loans, well that's another story...........

 

[Lidopaine82]

this depends on what kind of loan it is. If it is subsidized money, then by all means hold onto it! The interest rate is so low, all you have to do is shove that money into a CD and you will actually be making money on borrowed money. Now unsubsidized loans, well that's another story...........

if you have excess money, how do you know where it's coming from? i haven't recieved mine so i don't konw how it works, but don't they deposit all the money in your account? if you have money left over, how do you know which loan its from? ...i guess i'll find out soon enough lol

 

[phremius]

I put my left overs into a combination of CDs and ING Direct savings account.

 

[hockeydentist]

I put my left overs into a combination of CDs and ING Direct savings account.

I maybe mistaken, but I thought money given as a loan from the government for education could only be used to pay for an education or educational expenses.

 

[unlvdmd]

Hmmmm.... My family has made a lot of money off playing the interest "numbers game" when it comes to investments, so I watch and learn. I put my extra in the same sort of thing because (at the time, not so much anymore) the interest they are charging on that money is much less than what the money can make FOR you. Is it illegal? Never thought about it. They have never asked me where that excess was going. I just had cash in hand and played the numbers game. If anyone knows, that would be good to know.

 

[ItsGavinC]

You can repay the excess at any time. In fact, the sooner the better because interest will constantly be working against you. It is not smart to hang onto it if you think you can get by without it.

I'll go out on a limb and say that this isn't always true. If your loan interest rate is good, which it can be, then it's smarter to use that money to earn you more money rather than simply not take out the money.

I've locked in some of my loans at 2.78%, which is a great rate, and I can eclipse that easily with a savings account (4.25%), not to mention other longer term methods of investing.

For another example, if I had credit card debt, it would be smart to use that loan money to pay down the credit card debt, since it is likely that the loan rate will be much lower than most credit card rates.

 

[ItsGavinC]

if you have excess money, how do you know where it's coming from? i haven't recieved mine so i don't konw how it works, but don't they deposit all the money in your account? if you have money left over, how do you know which loan its from? ...i guess i'll find out soon enough lol

It will be from the non-federal loans, most likely. Usually the school will tell you which order the funds are used in, with federal being first and private loans being second.

 

[scalpel2008]

i don't think i would be so liberal in admitting that i use loan money for investments. technically, that's illegal if you read the fineprint. who knows, maybe it isn't enforced any more than copyright laws that don't allow you to photocopy textbooks.

 

[hockeydentist]

i don't think i would be so liberal in admitting that i use loan money for investments. technically, that's illegal if you read the fineprint. who knows, maybe it isn't enforced any more than copyright laws that don't allow you to photocopy textbooks.

Isn't that what the guy from enron got in trouble for.. using loan money to fiance his own interest...

 

[Slash]

I was wondering what happends with the left over loan money.

Hookers and blow

 

[Lidopaine82]

Hookers and blow

hahaha that was sooo funny

 

[drengineer]

I maybe mistaken, but I thought money given as a loan from the government for education could only be used to pay for an education or educational expenses.

That's not true. or is it? Oh crap, i spent it all in Vegas! Oh man i'm in big trouble!!!

 

[ElDienteLoco]

To the OP,

Unless you have some arrangement where most of dental school is being paid for by someone else (parents, previous lotto jackpot, etc.) Any extra money for you would probably be a PLUS loan which is fixed at 8.5% that starts accruing interest the day it is disbursed! (Not to mention the extra fees for taking the extra PLUS loan money initially) At 8.5%, It would be difficult to make a profit on most investments.

In some cases though, it might be appropriate to cut your losses with a CD/Savings account if you think you might need the money in the future. I borrowed the Maximum last year and put about $20k into an internet money market account (4.75%) because my wife (hygienist) is having a baby in September and we will need the extra money over the next two years. The loss of a couple of hundred bucks over two years is worthwhile for us to have that extra money if we need it.

 

[drhobie7]

Buy a shiny red scooter.