Grad PLUS

[stephanie says...]

so these are a new type of loan with a crap interest rate (8.5) and an origination/disbursement fee of 3%. i'm not well versed on all of this junk and i'm trying to figure out if i should take this out or a private loan (washu suggest T.H.E private loans/law access loans and something else). if anyone has done any looking into how tehse grad PLUS loans compare to private loans, care to share? i plan to get on the phone and do some research once the work week starts again monday

[yiplong]

At 8.5% it is cheaper to take out mortgage on a house.  This is screwed up; if we take out private educational loan, it is probably cheaper, provided we have good enough credit or has someone co-sign the loan for us.

[kokings]

How do we apply for the GRAD Plus loan... and when can we do this?  Thanks

[halfjewhalfgoy]

Here is a link for a general comparison of the gradplus vs private loans:http://www.wm.edu/financialaid/gradplusloan.pdf

Also, each financial instutuion offering the loan are throwing in their own incentives.  We have been spoiled these past few years by low interest rates, especially on student loans but with private loans it is not unconceivable for the effective rate to reach upwards of 12 to 14 percent. You can research historic prime and libor rates and this might help with your decision to verify this but historic rates are not an indicator of future rates.

[kingofspain]

discuss...

[chevelle]

I got that Grad PLUS thing.... I am turning all the loans the school gave me down. The interest rates were crazy.

[icf]

8.5% is really high, but i think the rates on private loans are pretty high now, as well. even with the best credit and co-signors, the best rate you can get now is like 6-7%.  also, the PLUS rate is fixed, and since interest rates are supposed to be going up, it might be a better deal than variable rates.

even the rates on stafford loans are disgusting now.  they changed the law so that the rates are fixed at 6.8%, no longer variable.

either way, no matter where we take out loans, i think we're all pretty much screwed on financial aid.

http://money.cnn.com/2005/12/22/pf/college/congress_loans/index.htm

[kingofspain]

since interest rates are supposed to be going up, maybe 8.5% fixed isn't such a bad deal.  that's what i've been thinking anyway.

[halfjewhalfgoy]

since interest rates are supposed to be going up, maybe 8.5% fixed isn't such a bad deal.  that's what i've been thinking anyway.

Yea, the prime rate will probably be around that figure when we start this fall.  Also, many lenders that offer the grapplus offer rate incentives when you make payment on time and when you have it directly withdrawn.

Is that you in your avatar because I swear you could pass for a friend that i have.

[kingofspain]

No, that's not me.  That's one of the best cricket players in the world- andrew flintoff.  I'm probably the only american-born cricket fan there is.  I have spent a lot of time in england so that explains it a little but i guess i'm a bit of an oddball.