Loan from parents?

[NghtSky04]

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I've recently been working on loans for medical school and was planning to fund everything with financial aid. The other day though, my parents e-mailed me letting me know that they'd be willing to loan me the money at a low interest rate (around 3-4%). It would be a substantial loan, roughly 300-350k. Nevertheless, the amount I would save in interest compared to a direct/grad plus loan seems too good to pass up.

The caveat is that my parents would be taking out a home-equity loan. They do have excellent credit, as the home equity loan would be below the prime rate. Nevertheless, I don't like the idea of my parents taking out a loan on their house in order to fund my schooling. On the other hand, they are adament that I take a loan through them. I save out on high interest payments and they get tax benefits through their home equity loan. They also assured me that they were well-off enough to handle the loan, even if something were to happen (lost job, etc etc). As a result, I was wondering if this would be the way to go?

 

[sazerac]

Federal loans come with both death and disability insurance. It would be appropriate for you to obtain such insurances too. Also, be sure your parents know you are going to have a small income until after residency. Make sure you both establish what kinds of payments are expected during your training, which will go on for years.

The only other negative is the idea of being under the financial thumb of your parents, but that is a social issue only you can evaluate.

 

[ram006]

I've recently been working on loans for medical school and was planning to fund everything with financial aid. The other day though, my parents e-mailed me letting me know that they'd be willing to loan me the money at a low interest rate (around 3-4%). It would be a substantial loan, roughly 300-350k. Nevertheless, the amount I would save in interest compared to a direct/grad plus loan seems too good to pass up.

The caveat is that my parents would be taking out a home-equity loan. They do have excellent credit, as the home equity loan would be below the prime rate. Nevertheless, I don't like the idea of my parents taking out a loan on their house in order to fund my schooling. On the other hand, they are adament that I take a loan through them. I save out on high interest payments and they get tax benefits through their home equity loan. They also assured me that they were well-off enough to handle the loan, even if something were to happen (lost job, etc etc). As a result, I was wondering if this would be the way to go?

Dude... seriously? Do you have any clue what a great position you're in? Take the loan and keep your word to pay it back. Done and done.