Are private student loans a good idea for my situation?
Asked by rman3008Hey guys, . I filed my FAFSA and I am ineligible for any federal loans, so I would have to take out private student loans. I have a co-signer with pretty good credit (credit score over 700) and, here's the kicker, I actually do have the money to pay it, but it's in in the stock market (it would be at a higher interest rate though). However, I was thinking of taking out a student loan since you can make small payments over a long period of time. Nevertheless, it seems like many people regret taking out these loans in the first place. So, a few questions: 1. Is it a good idea to take out a student loan? 2. Which lender do you recommend (so far I"m looking at Sallie Mae, Citibank and Access)? 3. Is there an option for automatic bill payment with these student loan lenders and would this prevent me from having the interest rate increase? 4. About what interest rates can I expect for a private student loan? Thanks so much for all your help.
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Answered by DaeRae
Private Loans have a variable interest rate and are usually fairly high. When it comes to these kinds of student loans, they are never a good idea if there is another option to pay. In the student loan industry, we consider private loans an "option of last resort". So 1, no. 2. For rates, compare Sallie Mae, Citibank, Wells Fargo, Wachovia, and Nelnet. 3. Auto pay may reduce the interest, but it won't keep it from going up with the market. The rates on these loans are similar to credit cards. 4. 10-18% depending on your cosigner's credit.
Private Loans have a variable interest rate and are usually fairly high. When it comes to these kinds of student loans, they are never a good idea if there is another option to pay. In the student loan industry, we consider private loans an "option of last resort". So 1, no. 2. For rates, compare Sallie Mae, Citibank, Wells Fargo, Wachovia, and Nelnet. 3. Auto pay may reduce the interest, but it won't keep it from going up with the market. The rates on these loans are similar to credit cards. 4. 10-18% depending on your cosigner's credit.
