Private loan advice - Which is the best one to get?

Paying for College
1

I need to take out a private student loan. I’ll be attending a UC campus. The school gave me a few options but I don’t know much about loans, and my family isn’t much help either. I’m thinking of getting a fixed loan, but would variable be better? I’d be scared if I got a variable loan and the interest kept increasing.

My options:
fixed Union Federal (4.75% - 10%)
fixed Suntrust (4.75% - 11%)
fixed Citizens One loan (5.74% - 11.75%).
variable College Ave, variable Citizens One, variable suntrust. The variable ones seem to have rates from (3% - 10.5%).

So that’s why I’m kind of confused what the better option would be. What if I got a fixed one and my rate ends up being super high? Or if I got a variable and it turns high? I don’t know which one to apply for.
I heard citibank has cheaper rates, or at least compared to Sallie Mae. I don’t know much about suntrust or the other options.

Thanks.

2

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06-12-2017 at 12:12 pm in University of California - Davis
I’m an incoming freshman and was wondering what math course I’m supposed to take if I want to meet pre-med requirements.

My EFC is 19,000. My father gambles a lot and lost all of our money, but my EFC still stands.
I got accepted to Cal poly SLO, UC Davis, and UC San Diego so far. My parents can’t pay the plus loan of 19k because they have bad credit, so I think I’d have to take out private loans for that, on top of the student loans. In total, my net for each school comes around to 30k a year.
I feel like having over $100,000+ in loans for a bachelors degree seems pretty ridiculous. What should I do? Should I just go to community college?
<<<<<

Pause!!!

No one is going to lend you that money w/o a qualified cosigner.

Also…a premed should NEVER be borrowing like this anyway!

Why aren’t you starting at a CC?

3

@mom2collegekids I already talked to UC Davis. They’re handling my financial situation for me. By winter quarter I will have a cal grant and my financial aid will be much better. I also have a qualified cosigner
I just wanted some advice on which private loan was the best.

4

You won’t know until the credit check is done what your interest rate is within those ranges at each lender. So, apply and see. Your cosigner is on the hook for this loan, too, so you should discuss the implications of this decision together.

In terms of other student loan features to consider besides costs, try reading the articles at http://privatestudentloans.guru

5

As mentioned before, until your cosigner applies and his/her credit score/income is looked at, no one can know which loan is best.

Are you still premed? If so, when do you think you’ll be paying those loans back? You’ll have 4 years of undergrad, 4 years of med school, 3-5 years of residency, and then maybe a fellowship. You wouldn’t be paying those loans back for 12+ years. Does your cosigner realize that his/her credit score will be hurt during all those years the loans will be outstanding?

6

<<<
@mom2collegekids I already talked to UC Davis. They’re handling my financial situation for me. By winter quarter I will have a cal grant and my financial aid will be much better. I also have a qualified cosigner
I just wanted some advice on which private loan was the best.


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Something doesn’t seem right. If there’s some weird delay for your Cal Grant, then Davis should be replacing it with a UC grant for fall quarter. Are they?

And why is there a Cal Grant delay?

Are you still premed?

I don’t think you fully understand the dangers of over-borrowing as an undergrad, particularly as a premed. You may be thinking, “I’m going to be a doctor, so it’s no big deal if I end up with a lot of debt.” You really have no idea how many young doctors struggle under their huge debts. Their med school debt is often unavoidable, but undergrad debt can often be minimized or avoided. You really have no idea how the $50k-100k of undergrad debt will wildly grow while you’re a med student and resident…adding to the huge med school debt. Starting a practice with $400k+ of debt is suffocating.

7

I’m only a freshman, I don’t know if I’ll be a doctor! All I wanted to know is if there’s any bad loans I should avoid, like Sallie Mae.

8

You want to take out the federal student loans ($27k over 4 years) and have someone cosign for another ~$20k/year? That’s ~$110k plus interest. Who’s willing to let you take on such life altering debt?

If a school requires you to borrow more than the federal student loan, it’s not affordable. Start at a community college and save your money.

9

Who is your cosigner? Is it a grandparent? You should not be asking any other adult to take the risk of taking on these loans. You can’t afford to start at this school. Go to CC for two years so you will have less debt in the end.

10

I must agree with this. $100,000 is a LOT of money. In most parts of the country, that’s the price of a nice small, older starter HOUSE. Or several years worth of average income. $100,000 takes many years to pay off, and that interest is going to snowball into well over that $100,000.

I’ve seen private student loans destroy people’s finances, even surgeon’s.

My roommate just graduated medical school this year, with this total student loan debt (undergrad - med) “only” $150,000. He lives on ramen and like a pauper, fearing how he’ll ever pay that back. And he’s a newly minted cosmetic plastic surgeon with “only” $150,000 total lifetime student debt. Many of his classmates hit the $250,000-500,000 mark, and suffer. While SOME hospitals help pay off student loans as a signing bonus for new doctors, not all do- and certainly not all pay hundreds of thousands as a signing bonus, and the number that do are increasingly limited. If you aren’t a top surgical student in a very specialized, high-demand field, the few hundred thousand signing bonus is a dream.

An affordable school (community college, state school, whatever) then transferring is a really, really good idea.

Or working full-time at your desired college to get the free tuition while attending your dream undergrad school.

“You want to take out the federal student loans ($27k over 4 years) and have someone cosign for another ~$20k/year? That’s ~$110k plus interest. Who’s willing to let you take on such life altering debt?”

11

@finallyastudent

You can stop feeling sorry for your newly minted cosmetic surgeon friend now. Until he is making the big bucks, he can do income based repayment. Cosmetic surgeons make a very nice salary.

@WayOutWestMom do you know that salary?

12

IBR payments is approx 10% of gross salary. If you make over 75k you cannot write off a portion of the interest of your loan. Remember if friend is young single , no dependents and really does not have anything to write off a large chunk of is income is going into taxes. Also let’s not forget malpractice insurance

13

@thumper1 @finallyastudent

There is no specialty called “cosmetic surgery.” Anyone can call themselves a cosmetic surgeon–even if they haven’t attended med school. There’s no regulations/laws about the use of the title.

There is a recognized, boarded specialty called plastic & reconstructive surgery. The average salary for plastic & reconstructive surgeons is ~$450K/year
[Medscape Physician Compensation report 2017](Medscape: Medscape Access)

And the $150K in student debt is actually of the low side of the average indebtedness of newly minted physicians. AMCAS’ survey show the average debt of a new doctor is $190K [Medical Student Education: Debt, Costs, and Loan Repayment](https://members.aamc.org/eweb/upload/2016_Debt_Fact_Card.pdf)

14

@WayOutWestMom

I was referring to a board-certified medical doctor who specializes in plastic surgery.

If you tried to call yourself a “plastic surgeon” in many/most states without having attended medical school, let alone operated on someone with no medical license you would be facing serious jail time. “Plastic surgeon” is slang, sure, but the assumption is an M.D. with a specialty in plastic and reconstructive surgery.

$450,000 is average in some cities, not all, and certainly not mine.

If the OP becomes a family doctor, or “family practitioner,” in a suburban midwest state, they certainly cannot expect anywhere near $450,000 a year. In the $100,000s, and some rural towns would drop that salary more. Even at Saint Barnabas Hospital in the NYC greater metropolitan area, newly minted doctors make in the $50,000s. Yes, $50,000s. I’ve seen several of their tax statements as I did their tax statements. :smiley: At Bronx-Lebanon Hospital, it’s in the $190,000s. People always assume doctor = BANK in salary, and are often shocked at the huge income differences between cities, specialties, education, economy times, schools attended, research done, and research hospital vs. rural family medicine clinics. The OP shouldn’t expect anywhere near $450,000 as their expected salary right out of medical school. A possibility, not an expectation. $150,000, or $500,000, in lifetime student loans for an undergraduate and medical school education are very different when we’re talking rural family medicine clinic doctor vs. Los Angeles metro area reconstructive surgeon to the stars. OP should really research their desired fields, hiring rates, and not expect half a million in salary right out of the gates.

The recent medical graduate I know has that much in PRIVATE student loans. His time allowed to do income-sensitive repayments on PRIVATE student loans is limited. Especially since he had a gap between undergrad and medical school. Private loans don’t have the same income-sensitive repayments for extended timeframes as federal loans.

$150,000 lifetime student loans INCLUDING medical school might be on the low average. $150,000 for UNDERGRAD is not average or wise. Going into that amount of debt for any undergraduate degree just isn’t worth it in interest alone, let alone the fact that plenty of pre-med students decide they no longer want to go into medicine and graduate with another major altogther. No one should graduate medical school with $500,000 in total lifetime student loans. That spells p-a-i-n.

15

First year residents make about $50,000 a year. Actually, I think it’s a little more than that this year…and if I’m not mistaken, all first year residents make the same salary.

But once done with residency…I can’t think of any specialty of any kind where a practicing physician working full time earns $50,000 a year.

@WayOutWestMom likely has salary figures…and a link to post for them.

@finallyastudent

16

@finallyastudent

You called that person a cosmetic surgeon, I didn’t…there is vast difference between a cosmetic surgeon and plastic surgeon. BTW, plastic surgeon isn’t slang.

Interns (first year residents) earn in the $45-70K range. The exact salary depends upon the payscale of the residency program. Some residency programs also give residents a housing allowance up to an additional $15-20K/year or provide FREE housing (several NYC hospital programs do that). Residents get other perks too–like technology, travel, book allowances and other compensation that are not included in the base salary. As a resident advances during their training & they take on more responsibility/require less supervision, they get a raise, usually once a year. And depending upon the policies of the residency program, residents who have an unrestricted medical license (applied for during PGY2) can, with their department’s permission, moonlight and earn $120-$250/hour.

News flash–physician salaries are lowest in popular urban-suburban areas (that includes NYC). Physician salaries are highest in rural, medically underserved areas like west Texas or North Dakota or eastern WA state. The free market at work. (FWIW, D1–who is not a plastic surgeon-- was offered a job at rural hospital before she even started residency for $350K/year with the potential to earn $500K within 3 years. The fresh-out-residency radiologist at the same hospital earned $500K/year from the minute he walked through the door. )

Physicians Salary Data 2017–http://www.medscape.com/slideshow/compensation-2017-overview-6008547#4

Family medicine physicians earn an average of $210K annually.

I do agree with your one point–taking on excessive student debt for undergrad is foolish if one plans to go to med school. So is taking private loans to pay for undergrad or med school. (It was your friend’s choice to take private loans to pay for his medical education and now he’s dealing with the consequences. However, very, very few US medical students rely on private loans to pay for med school. I’m guessing your friend wasn’t a US citizen at the time he began med school.)