Private loans beyond the amount approved by your school

[ErinKG]

Yeah, that's what I'm starting to think too. I'm hoping to find someone who has received a loan without both. I'm confident that I'll get the loans for the amount within the COA, but I'm going to need more than 15k over 9 months. Also, if I don't get a paying job in the summer I'll need money for that. As soon as my mortgage refi goes through (tomorrow!), I can start applying for the private loans and see what happens.

I'll check WF and BoA. I have long-time checking accounts at both. I wonder if they care?

Erin

[limonjello]

I think my rate was about 5.5%, but that is because of strong credit.

Was that for a loan up to your COA, or actually above it.  That's a really great rate on an unsecured loan (home loan rate, even).  Who was that through?  I'll have to check them out.

[Who's Crowdaddy]

I think my rate was about 5.5%, but that is because of strong credit.

Was that for a loan up to your COA, or actually above it.  That's a really great rate on an unsecured loan (home loan rate, even).  Who was that through?  I'll have to check them out.

Sorry if I confused the thread. Mine was just for my private up to cost of attendance. It is for the private part of my UT loans and that may not last, it is the current libor rate plus 2.55% I think. That was through access and that is what they give for good credit. I think normal is libor plus 3.75%. Those rates are specifically for UT, different rates for different school.

[_____]

some good tips about credit scores...

http://moneycentral.msn.com/content/Banking/Yourcreditrating/P116527.asp?GT1=6468

[GoDawgs]

I need to borrow a little more than my allowance (so I can pay for my one-bedroom).  I haven't quit my (high-paying) job yet.  Would they give me a loan without a co-signer if I have a current income?  In other words, if I am quitting at the end of July, should I go to the bank in June and ask for a loan and not tell them that I am quitting soon?

Also, separately, if you get a private (beyond allowance) loan for law school, is it considered a student loan?  Do they make you pay the payments while you are in school or do they let you wait until you graduate?

I'm not too worried about the interest rates (as long as they aren't astronomical)--just getting the money so I can pay my rent.

Thanks!

[_____]

I need to borrow a little more than my allowance (so I can pay for my one-bedroom).  I haven't quit my (high-paying) job yet.  Would they give me a loan without a co-signer if I have a current income?  In other words, if I am quitting at the end of July, should I go to the bank in June and ask for a loan and not tell them that I am quitting soon?

Thanks!

These loans DO count as student loans, and therefore you can choose to defer your payments while in school. As for applying while you have income, knowing that you will soon have no income...

You COULD try this, but I would be extremely careful, for the following reasons:

(1) Beware any language in the loan terms regarding your employment--loans offered under certain assumptions can often come due in full if you purposely tried to hide your real motives.

For example, "primary residence" home loans are cheaper (in terms of interest rate and fees) than "investment property loans" (ie a home you own, but don't live in; you rent it to other people.) 

As such, lenders often include terms in "primary residence" loans to prevent people from "pretending" that the house they are buying is going to be their primary residence, and then moving out right away so that they can rent it out to someone else...

Basically, if you buy or refinance a home under a "primary residence" program and the bank finds out that you moved out and started renting it to someone else within a certain window of time (regardless of where you are living now, whether presently buying or renting), the ENTIRE loan is due and payable in full within a short period of time.  (Usually just enough to let you have a fire sale and unload the property, instead of declaring yourself bankrupt.)

So if you're going to try to get a loan that requires employment, and you know you are going to be leaving your employment, you had better make sure you read those documents carefully prior to signing...

The last thing you want to do is have to pay the entire thing in full on a moment's notice.  (If you had that kind of money, you wouldn't need the loan.)

(2)  Such shady deal-making, if found out, could perhaps become an impediment to admission to the bar.  I don't know if it is, but it might be, and it would be a real shame to owe all that money for law school and not even be able to call yourself a lawyer...

Just some thoughts--my suggestion: either find a cheaper apartment, or get a roommate, but don't leverage your future on "I think I can get away with it" just to afford a better appartment...

[GoDawgs]

Thanks for the input.  I'm not going to try to "get away' with anything--I've just heard that they compute your interest rates, etc, on your current income.  If I can defer payments on the private loans beyond the allowance, that would be better anyway.  I just hope that my parents will be sufficient co-signers since they have co-signed on my siblings' huge college loans and don't make that much.

But certainly, I wouldn't do anything that would be risky in terms of the loan or getting admitted to the bar.  It was just a question.

[Hegel]

(1) Beware any language in the loan terms regarding your employment--loans offered under certain assumptions can often come due in full if you purposely tried to hide your real motives.

For example, "primary residence" home loans are cheaper (in terms of interest rate and fees) than "investment property loans" (ie a home you own, but don't live in; you rent it to other people.) 

As such, lenders often include terms in "primary residence" loans to prevent people from "pretending" that the house they are buying is going to be their primary residence, and then moving out right away so that they can rent it out to someone else...

Basically, if you buy or refinance a home under a "primary residence" program and the bank finds out that you moved out and started renting it to someone else within a certain window of time (regardless of where you are living now, whether presently buying or renting), the ENTIRE loan is due and payable in full within a short period of time.  (Usually just enough to let you have a fire sale and unload the property, instead of declaring yourself bankrupt.)

This is called a "Due on Sale" clause.  Banks rarely ever escalate a loan based on these clauses.  UNLESS interest rates start to go higher and you have a tasty fixed rate, there's not much to worry about   BTW, people get around this whole thing by placing the home in a trust and/or being careful about changing the name on the insurance.  Loan companies are notified when insurance beneficiaries change.  Then, the beneficiary of the trust can be changed without triggering any notification to the loan company.  It is done frequently in owner finance situations or "rent-to-buy" agreements and, as far as I know, is not considered fraud.

Loan companies are silly AND they want your money.  In the student loan case, if they really cared about this problem, they'd call his employer to validate employment.  Shame on them for not doing their research or asking specifically on the loan app whether the applicant plans to terminate employment.  Of course, it is common knowledge that law students attending full-time do not work.

[_____]

This is called a "Due on Sale" clause.  Banks rarely ever escalate a loan based on these clauses.  UNLESS interest rates start to go higher and you have a tasty fixed rate, there's not much to worry about   BTW, people get around this whole thing by placing the home in a trust and/or being careful about changing the name on the insurance.  Loan companies are notified when insurance beneficiaries change.  Then, the beneficiary of the trust can be changed without triggering any notification to the loan company.  It is done frequently in owner finance situations or "rent-to-buy" agreements and, as far as I know, is not considered fraud.

Of course the home loan circumstances are different--I merely mentioned it so that the poster would know to read the fine print... God knows what is in a Student Loan that goes above COA and is entered into on the basis on your continued employment...

As for it being common knowledge that full-time law students don't work, all the more reason for the lender to either (a) reject you, or (b) look into whether or not you were being fraudlent at the time of signing...

To the original poster: good luck; I hope your parents can pull it off for you.  (I know mine can't...)

[Fabyahluss]

I don't know if this has already been said, but...

I spoke with the financial aid dept. at the law school I will be attending and asked this very question. I was told that what one should do is request more money from the private lender than their current student budget allowed, and then to appeal that studet budget by their school's fin aid dept. That way, your credit report won't get hit twice, but you still may be able to get more money than you were previously allowed.  Of course, this is all assuming your appeal is approved. HTH.