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furyhecla

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Do medical students take out private loans from banks to pay tuition? I really just hear about federal loans, but banks offer medical education loans as well. I am wondering... what is the catch?

I've just been 'awarded' the 6.8% unsubsidized direct Stafford loan, but I've found banks that seem to offer better terms (e.g., no interest accrual during school, unlike the Stafford)

https://www.usaa.com/inet/pages/bank_student_loan_main

https://www.studentloan.com/privatestudentloans/citiassisthealthprofessionsloans.htm

So if I have good credit (my husband and I do, and my husband will be continuing to work)... and I expect we could get lower interest than 6.8%. (I haven't applied for any yet, so I don't know the apr).

I'm just wondering why this avenue isn't discussed, perhaps because traditional med. students wouldn't have good credit yet?

Thanks for advice
 

LaughingMan

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Mar 30, 2012
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Do medical students take out private loans from banks to pay tuition? I really just hear about federal loans, but banks offer medical education loans as well. I am wondering... what is the catch?

I've just been 'awarded' the 6.8% unsubsidized direct Stafford loan, but I've found banks that seem to offer better terms (e.g., no interest accrual during school, unlike the Stafford)

https://www.usaa.com/inet/pages/bank_student_loan_main

https://www.studentloan.com/privatestudentloans/citiassisthealthprofessionsloans.htm

So if I have good credit (my husband and I do, and my husband will be continuing to work)... and I expect we could get lower interest than 6.8%. (I haven't applied for any yet, so I don't know the apr).

I'm just wondering why this avenue isn't discussed, perhaps because traditional med. students wouldn't have good credit yet?

Thanks for advice

I think you're spot on with the lack of a good credit score. Discover Student Loans are also a thing to check out. If I am forced to to take loans for Med School--I will most likely go with Discover. They also have a 2% Graduation Reward :)

Here is a Link
 

LUCPM

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I think you're spot on with the lack of a good credit score. Discover Student Loans are also a thing to check out. If I am forced to to take loans for Med School--I will most likely go with Discover. They also have a 2% Graduation Reward :)

Here is a Link

Do students typically take out private loans? My understanding was you first take out Stafford loan to cover your tuition, then take out grad plus loan (if your credit is good/ok) or take out other private loans if you need additional funds. Could any one share their experience?
 
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DrMidlife

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That USAA/WellsFargo loan is interesting - 60 months of deferment during residency is rare.

But. You're misunderstanding things. You can get away with not making payments during school and residency, but you're dreaming if you think interest isn't accruing. These are banks. They're selling you a product to make money.

Also, good luck finding a rate that's both fixed and low for private loans.

Basically, the deal with federal loans is that you can make assumptions without having to hire a lawyer to go through your MPNs with you. Federal loans make room for you to pay reduced amounts based on your income level, such as during residency, when you finally start drawing a paycheck again. After you finish med school, within 6 months you're on the hook for $2500 or more per month in payments, unless you have access to the federal programs (or you can score a deferral during residency).

Your credit rating will help a lot for GradPlus, which is what you borrow when your Stafford limit is hit.

Down in the "interdisciplinary" forums there's a financial aid forum, where people seriously get into the nitty gritty of this.

Best of luck to you.
 

LupaCupcake

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Watch out on the fixed versus variable rate of interest. A variable rate may seem appealing to some if they think it will drop low at times, but this also means at others it may spike and you can never be 100% sure if you are coming out on top near the end. I prefer fixed rate because you can calculate exactly how much $$$ is building up.

When possible, it is always best to not get interest tacked on during the time in school, but that is rare. In the case of those types of loans the government takes care of the interest that would be building up.

If you are a member of USAA, look into the short term CD's they offer and other investment options. You could always invest some money and let it sit so maybe near the end of your time in med school you have enough to cover tuition or take out a large chunk of the school loans already accumulated. Most investments are long term so majority won't work for something like that, but they do offer a 6 month CD which is a very short time frame compared to most and you can keep adding more money to that CD without negating the original contract period. If you are daring you can use stocks to try and build up money to pay off loans at the end since stocks do yield a higher return (typically), but they are also higher risk so you could lose all of it. Just a thought
 

pkwraith

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Not to mention that if you're looking at IBR or Public Service Loan Forgiveness, they're only for Federal Loans, not Private.
 

MissR6

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Apr 8, 2011
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USAA's CD rates are pretty abysmal. Although I'm sure no one else is fairing much better right now either. Even if you could afford a super jumbo ($175000+) the FIXED rate APR on their 182 day CD is only 0.76%
 

LUCPM

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So if my credit is horrible, I probably won't be eligible for grad plus and private loans??? :confused:

According to a representative from one school I interviewed at, bad credit could affect your eligibility for GradPlus loan. You may be able to get other private loans though.
 

DrMidlife

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According to a representative from one school I interviewed at, bad credit could affect your eligibility for GradPlus loan. You may be able to get other private loans though.

Uhh, private loans are not going to be more forgiving than GradPlus.

If you have bad credit, you need a cosigner. If you have neither good credit nor a cosigner, you have to go to a school that has COA under the Stafford limit (currently $40k/yr). If you can't get into a cheap school, you have to fix your credit and/or find a cosigner.
 

Giggles88

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Apr 16, 2012
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Uhh, private loans are not going to be more forgiving than GradPlus.

If you have bad credit, you need a cosigner. If you have neither good credit nor a cosigner, you have to go to a school that has COA under the Stafford limit (currently $40k/yr). If you can't get into a cheap school, you have to fix your credit and/or find a cosigner.

So basically my dream is dead..

...or at least deferred for another 5 years. :(

Thanks a lot mom! :mad:
 
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