Private loans vs. GradPLUS

[agb2782]

Hello all: for this year of dental school I'm looking at either GradPLUS loans at 7.9% interest or a loan through a private lender (Discover, Chase, or Citi) at a much lower, though variable interest rate (after checking my credit, I would be eligible for 3.25% interest).

Obviously, if variable interest rate stay somewhat low and don't skkyrocket to the cap of 18% scared then I would save thousands over the course of repayment. However, I know that private loans are ironclad and don't offer programs for income-based repayment and loan forgiveness. It would be a large difference in eventual repayment, though.

Anyone have any experience with making a decision like this? Is taking the risk worth it? Thanks in advance.

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[theleatherwalle]

I wouldn't take the risk. This economy is not one for risk takers.

I would tell you never to grab a variable rate ever.

Congrats on the high credit score by the way though!

 

[mixoma]

I took out a Wells Fargo student loan @6.8% instead of the grad plus, this loan also had no disbursement fee unlike the grad plus loan.

 

[Lethstang]

take grad plus

 

[Sublimazing]

I was able to defer my Grad Plus during residency... Dont know if you can do that with private

 

[PhoebeAZ]

Private loans are TOO RISKY. I know nearly 8% interest seems like so much more, but the federal loans are just so much safer. If you took a private loan and something happened to you or your family and you couldn't work anymore, you're in big trouble. Student loans (whether private or federal) can never be discharged in bankruptcy, but federal loans do have important safeguards like you mentioned.

You seem to have done your homework and you know the risk. It seems like the hang up is the the price, better safe than sorry.