aurevoirLA

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I'm wondering whether or not I will qualify for low interest loans, and also whether or not it's a good idea to take one out. I'm starting medical school next year, and sitting on a pretty good sized savings-- enough to cover the whole cost of med school.

Will I qualify for a low interest loan? I hear they have a 3 percent interest rate. Is that true? And if so, I'm better off taking out the loan and investing my savings, right?

Any input or ideas will be much much appreciated!! I'm totally new at handling finances.
 

bonez318ti

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aurevoirLA said:
I'm wondering whether or not I will qualify for low interest loans, and also whether or not it's a good idea to take one out. I'm starting medical school next year, and sitting on a pretty good sized savings-- enough to cover the whole cost of med school.

Will I qualify for a low interest loan? I hear they have a 3 percent interest rate. Is that true? And if so, I'm better off taking out the loan and investing my savings, right?

Any input or ideas will be much much appreciated!! I'm totally new at handling finances.
I'd say you are doing a pretty darn good job with your finances having saved up enough to cover the entire cost of medical school!!

In anycase, if you can comfortably cover the costs of med school, I'd use that money to pay for school rather than take out additional loans, unless you can find a higher rate of return vs. the loan interest rate for your money with very little or no risk.

ie: If you have a choice between a 3% loan and paying out of your savings that is earning 1%... and you pay with your savings, you are in effect earning a 2% (3%-1%) return on your money, since you aren't paying interest on the loan.

On the other hand, if your rate of return on your savings is 5%, and the loan is 3%, then take out the loan since you would net 2% on the total amount of your loan.
 

EvilNewbie

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If I were you, I would MAX out all my stafford loans each year of medical school and used part of it to pay the tuition. Then take the remaining money and hid it in a secuirty deposit box.... ONE day you are going to need money for a very nice HOUSE, or a CAR, or a an ENGAGEMENT RING, or something that requires you to take out a loan. You can use what money you saved from your savings and the extra loans you took out to pay part of it or even ALL of it.... the interest rates in school are the BEST you can get and will save you $100,000 or MORE on interest compared to the regular loans people take out like mortgages and stuff. You pay peanuts compared to what regular people pay on regular loans.... that's if you plan wisely...
 
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aurevoirLA

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Hey Thanks Everyone,
I'm not sure what the interest rates are on all the loans available out there. With such a savings, does anyone know if I would be likely to qualify for subsidized loans.... I'm thinking probably not, but I really don't know, having never done this before. Does anyone know how hard it is to qualify for subsidized loans with a savings? I haven't made any serious money in the last two years as a postbac.

Also, does anyone know what the interest rates are on the unsubsidized loans? Maybe it depends on the lender? If so, which are the better ones? I guess there are no payments during school, but does interest still accumulate during that time? And one more question-- do some lenders charge flat out fees? My school's financial aid office quotes a Stafford Loan Fee of $255. Is that pretty standard?

Whew, lots of questions in that last paragraph.... any help much appreciated. :)