supermegaglossy

hopefully someone knows about this..
I've maxed out the federal student loan amount that you can get each year, so i'm looking to get a private loan. However... the interest rates are a bit higher on these... and i'm starting to get worried about how i'm going to pay it back. honestly, instate undergrad is cheap, but once i tack on med school, i'm going to be broke as shit.

as far as private loans go, i can get either prime rate from wachovia which is like 7% now (and going up) or a libor (which is at like 2. something) + 2.89% or so with Bank of America. if i can save a few thousand dollars in interest over time, i'd like to.

also, i'd like anyone's input on investing a little money here and there to maybe help out with the payback. i mean, if i put a few hundred dollars in somewhere, is it unrealistic to expect a few thousand in 5-8 years?

any and all intelligent advice is appreciated

supermegaglossy

edit: duh, i know that 2.~ + 2.89 is less than 7%, but which is more stable and more likely to save money over time..

thanks

ccannizz11

as a general rule, banks give you a lower interest rate when it's less risky for them. Which, in turn, generally means it's more risky (or less stable) for you. Can't really say anything specifically about your situation, but an example might be if the 7% rate is fixed while the lower rate is adjustable over time?

Oh and for your sencond.... yes, that's unrealistic, unless you're going to start a savings account or something that you make periodic deposits into. But to make one deposit and expect a rate of return that more than doubles your money each year is unrealistic.

doopstr

With these loans when do you start the payback? When you are done with school?

Unfortunately you are going to find out that med school students, and later medical interns/residents are very poor. By the time you start making the big bucks you will be very deep in the hole. It will take several years of the big salary just to get your head out of the water. The only plus side is that as an intern/resident you will be working so many f'ing hours that it won't matter how much money you have because you will have no time to spend it.

You will eventually be rewarded but the road to success in your field is long and hard.

supermegaglossy

i'm talking about ... stocks and things. although, i've always told myself i'd never trust the stock market. it's all gambling. but i'm desperate.

i start paying them back 6 months after i graduate. there is usually a period of deferment.

Mike 350Z

I wouldn't waste your time researching individual stocks and such; you'd be better with mutual funds (because they basically do all that research & diversification for you). Plus the best bonds and money markets are comparable to the interest rates on your loans, so going that route is like robbing Peter to pay Paul...kind of useless.

I was always taught to get out of debt (or in your case chip away at your current debt) before investing in stocks, bonds, etc. I'd say take any extra money you have and put it towards your loans now instead of investing it. True, the interest rate you earn on the money you invest might be a tad higher than that of your loans, but since your principle of the loans is/will be so much higher, the dollar amounts of interest paid is going to be more than the dollar amounts of interest earned.

CliffsNotes: Put extra money towards current debts to reduce principle, especially while youre in undergrad and it's low.


Oh, that period of deferment doesn't mean you can't pay if you really want to. Never hurts to pay up early. Also, look into consolidation and lenghthening the repayment term. I did consolidation and it lowered my monthly payment by about $80.