Since you asked, I figured I'd give it a shot. I would be asking your potential lender a lot of questions and reading the prom note word for word and have a total understanding of what you're signing up for.
What happens if I die? Is it forgiven upon my death or do you go after my estate? A GradPLUS is forgiven for death and total disability. I doubt Maine would be forgiving their loan if you are disabled... may not seem important now but plan ahead.
Ask about deferment and is there a limit to the total amount of time you are allowed to defer over the length of the loan. Is it the 4 years or residency? What if I return to school? What if I decided to do a fellowship?Also ask about forbearance the same questions. Most private loans want their money back at some point in time.
What is the length of repayment? Is it 10 years? Fed loans have a 25 years (or 30 for a consol). The longer repayment, the less the monthly minimum and the more you can put towards the higher risk debts you may acquire (mortgage, practice etc-- no one in the world of those loans cares you were out of work for 3 months and behind on the bills, trust me). Would you be better off with a 20% downpayment for the house as opposed to 5%?
Do they offer graduated repayment or an income contingent repayment plan? Federal loans do. Would you be better off with a lower monthly outgo initially when you are trying to get approved for a mortgage? Maybe...
The rate now looks pretty but consider the risk of the debt as well and not just for you but for your family (spouse, kids etc). Also consider what you want to finance several years from now. You may be better off requesting a forbearance on your GradPLUS (either way the interest accrues
eferment or forbearance) as does on the Maine loan.
Is their a lifetime max for all debt? I have seen alternative lenders not lend once a kid hits a certain level of all debt. You may be eligible this year, but what about next year? Or the year after?
Loan fees 0-6%? Who gets 6%? Will you need a co-signer? And if so, under what conditions? I'm not a fan of having co-signers for a multitude of reasons which you've seen in other posts.
In short, ask a lot of questions and take the time to understand the real risks and the real cost of going either way and not just in the monetary sense. Ask your FA person to run numbers with you in regards to if you can't defer your fed loans (highly likely) and enter the income contingent repayment instead (vs a forbearance). For the first 3 years of the income contingent I believe the feds pay the interest on the sub piece if your payment isn't enough to cover it.
If I lost you anywhere, let me know and I'll give it another shot.
