T.H.E. Private Loan vs. Grad PLUS

[fewchewrmd]

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I'm trying to figure out what is the best deal for T.H.E. loans: Private or Grad PLUS. The Grad PLUS is fixed 8.5% for the life of the loan (-1.3 % bonus for a total of 7.2%). I qualify for "premier credit" so my rate for private loans would be 1.75% + LIBOR (-1% bonus). LIBOR historically has averaged less than 5% and the current rate is 4.68% bringing my interest rate to (4.68+1.75-1 =) 5.43%.

Even though I believe the fed will tighten next wk and again in August, I anticipate that we are in the last leg of the tightening phase and that the interest rate hikes will cap between 5.5%-6%.

Another benefit I see in the private loan is no mandated origination fees. Considering this theory does anyone see a reason to choose the Grad PLUS loan over the private loan?


T.H.E. Private Loan Overview
http://www.northstar.org/Med/termsheet.aspx?ltyp=2&SchoolTrId=42&eduLevel=

T.H.E. Private Loan vs. Grad PLUS
http://www.northstar.org/GradPlus/CompareGradPlus.aspx

 

[sf1991]

i went with pnc grad plus over private. i prefer the peace of mind of a fixed rate (down to 7.25 with on time payments and electronic payment) over a variable interest loan. you may be right about the interest rates plateauing, but i didn't want to roll the dice. besides, i bet when i consolidate down the road i will be able to get a lower rate than the 7.25, so i am not sweating it. also, i don't think i have to pay any origination fees through pnc, and since this is a government loan, i think i can consolidate this with my staffords as well. but, i don't think you can consolidate your private loans with the stafford. i am new at this myself, so feel free to correct me if i am wrong. i could only handle researching this stuff for so long... very dry. in the end, i know i will be about 250k in the whole, so a few bucks here and there won't make too big a difference. lastly, i went with pnc over the for my stafford and grad plus mainly because i have my undergrad loans already consolidated with pnc. i thought it might make things easier down the road. i didn't see any differences between the two.