Loans & BAD credit - page 2

The topic of "how do I pay for school" has come up several times on this board, and I've read the good advice about not worrying about working through school, and just take out lots of student loans.... Read More

  1. by   tennyson
    Stafford loans don't have anything to do with your credit, they are only based on being enrolled at least half time in a degree program, and not having defaulted on previous student loans, or having a drug felony conviction.

    Signature loans, unfortunately, are based on credit, and I just got denied one because the past 6 months have been hard and I've missed 4 months of payments on one credit card and 3 months on another. Based on those two "delinquencies" I was denied the loan, even though I took out signature loans previously for two other school years. If I had a cosigner, I would get the loan. Since I don't, there goes my best laid plans.

    Anyone have any idea what type of credit score or report is necessary to get the signature loan? I'm wondering if I clear up the delinquencies and reapply for the loan within the next 2 months if I'd have a chance at getting it. I asked Sallie Mae, but the representative just kept repeating "We can not disclose that type of information" Have any of you been denied a signature loan, then reapplied immediately after "fixing" the problem?
  2. by   WntrMute2
    Check into the Mayo program. When i researched schools 4 years or so ago, their tuition was just over 7,000 dollars total and they would pay 1,500 dollars per month for every month you worked their once you graduated.
  3. by   Roland
    Normally, you need a FICO, Experian, and or Beacon score in excess of 700 to qualify for most signature loans. In most cases they will pull two bureaus and take the lower of your two scores. Sometimes they will pull three, and take the middle score.
  4. by   TLC RN
    Quote from Roland
    Normally, you need a FICO, Experian, and or Beacon score in excess of 700 to qualify for most signature loans. In most cases they will pull two bureaus and take the lower of your two scores. Sometimes they will pull three, and take the middle score.
    Roland-
    If you have over a 700 and are going to go to school full time you can get a signature loan on your own?
  5. by   Roland
    No, I am not saying that. Income qualification is a seperate and distinct issue. I'm not sure how Bank One deals with income (and others who offer graduate education loans), but I believe they will require a co-signer if you're not going to be working during grad. school. However, your CO-SIGNER will have to have acceptable credit scores which will probably be in the 700 plus range. Now YOU MAY be able to get around this requirement by applying for other signature type loans before starting school if you do not bring up your "imminent eduation plans", but then these would just be regular signature (not higher education) loans.

    For someone with good credit, but NO co-signer or other options (and in a position where Stafford Loans won't be enough) you COULD consider giving "yourself" a loan from credit cards. At one time I had about two hundred thousand in available credit, and there was nothing to "stop me" from cash advancing most of that money and using it for school. Of course this would probably mean trashing your credit while in CRNA school since you wouldn't be able to pay the minimums. However, when you graduated you would have at least three options:

    a. Pay the credit cards with your now much higher income from being a CRNA. This is the most honest, but also the most financially distressing approach since you will be paying late fees in addition to high interest rates (and your credit will still be damaged, ironically perhaps more than from filing a BK since you will continue to show late, closed accounts until they are paid in full).

    b. Use one of the many credit counseling programs modeled on Consumer Credit Counseling which freeze or vastly lower the interest on the credit cards and waive most of the late fees (these programs also hurt your credit, but probably no worse than it will already be by this time, and they will save you tens of thousands in interest and fees).

    c. File a chapter Seven Bankruptcy. Providing that you have not already started a high paying job which might cause the court to throw out your case (thus you would want to file at the end of your last semester). In addition, it shouldn't appear to the court that this was your intention from the start since that would constitute grounds for dismissing your case (thus you should make the minimum payments for at least six months after getting the "loans"). This plan also suffers from the weakness that if Bankruptcy reform is passed while you are in CRNA school the loans might very well no longer be dis-chargable in Chapter Seven proceedings (you could use one of the above plans or file a chapter thirteen). Of course this course of action raises numerous moral and ethical considerations (of course that doesn't stop major corporations from employing similar strategies on a daily basis). However, it has the advantage of essentially giving you a "free" (at least in terms of money) CRNA education. Keep in mind that usually, unless you are permanently disabled government backed student loans CANNOT be discharged in a chapter Seven BK. As always consult your attorney for further details (one that also deals with the mob or major corporate interests would be especially useful).
  6. by   Brenna's Dad
    Trully no offense Roland, but that is one wacky scheme. Perhaps doable if no other options existed, but I can only imagine how many years it would take to regain your credit rating after finishing school.

    Better to starve a wee bit than to wreck your credit in the manner you described.

    One option for people with bad credit is to approach facilities for a stipend, especially after finishing your first year successfully.

    Regarding the military, one of my classmates is in the reserves and assures me that CRNAs can only be deployed for three months at a time since it is such a financial hardship.
    Last edit by Brenna's Dad on Mar 15, '04
  7. by   Roland
    As I said it is a strategy best left as a last resort. One however, can imagine scenarios where it might be the only avenue for going to CRNA school. Consider, also that there have been many successful businesses started via "credit card" financing. I personally know someone who borrowed over fifty thousand in "cash advances" to start a carpet cleaning business which today earns them well over 100K per year! Also, is it really so "crazy" to consider essentially "unsecured" financing rather than the government subsidized financing (student loans) which amount to virtual indentured servitude should you NOT be able to pay them back. What happens for instance with student loans if you should flunk out of CRNA clinicals after accumulating an additional 50K or so in debt or maybe you graduate and your wife develops ALS, and you need to devote yourself to her care (and hence cannot work as a CRNA) Personally, I think these companies are absolute LOONS for giving "ordinary" people access to cumulative lines of credit that often exceed 100K with almost NO applications and absolutely NO security. However, any good business (and you are indeed a business with yourself or perhaps your wife as the CEO) considers all of their options in this struggle for survival that we call life.

    As to credit I can respond to this one with a bit of perspective. I have seen thousands of credit files and have personally witnessed NUMEROUS instances where someone who had a Chapter SEVEN BK that was a couple of years old with a HIGHER credit score than someone who never had a collection or late payment in their life! It used to be that an actual person examined your credit and made a determination as to credit worthiness. However, we have gone to a computer generated, score based system that often gives outcomes that are inequitable (but which do predict default fairly well over a whole population and hence works for lenders if not always for consumers). You may wish to visit www.creditscoring.com and creditaccuracy.com for more information about this system which effects every one who read this.
    Last edit by Roland on Mar 15, '04
  8. by   WntrMute2
    [QUOTE=Roland]As I said it is a strategy best left as a last resort. One however, can imagine scenarios where it might be the only avenue for going to CRNA school.QUOTE]

    You know there are numerous reasons for NOT going to CRNA school and being unable to manage it financially is one as unfair as that seems. Please, do not take credit card loans out you have no intention of paying back, it is decietful and dishonest. I don't shed a tear over the CC companies but really folks, this is distasteful. Save up some money, work overtime, take a contract (BTW, the Detroit Medical Center will pay you to go to school if you work there after you are done.) do something other than start a new career cheating.
  9. by   Roland
    Not paying back the credit card loans was only ONE option that was listed. Options a&b involved taking the credit card loans and then paying them back (under two alternative scenarios). In other threads I have listed numerous other options up to and including prostituting one's self to pay for school (unfortunately in my case few would pay). You say don't cheat, and I ask what is cheating? Is it cheating for credit scoring companies to develop, automated protocals which reduce your value to a number that often has little basis in reality? Is it cheating that someone who has a bankruptcy only a couple of years old may have a higher credit score than someone who has never even paid a bill late? Is it cheating that insurance companies (including auto) are now using the scores to charge higher rates (or deny coverage) to people with low scores but good driving records, while offering better rates to those with high credit scores, BUT worse driving records? Is it cheating that CRNA and other graduate schools have legislated themselves a monopoly on the ability to practice certain professions (via their ability to confer licensure), and then increase their tuition at rates several times that of inflation (relative to the overall economy). Is it cheating that I (or my wife) have the luxary of attending CRNA school with the other person supporting them while a single mother somewhere out there is denied the same opportunity due to financial necessity? Life of course is not always fair, but this may be an avenue for some people to achieve a shot they otherwise wouldn't have.

    One thing that I learned in the armed forces was that you seize any opportunity presented to achieve your objectives (and I wasn't even able to be in special forces THOSE guys take the concept to a whole different level). Without regard to the methods used to finance your education in the end if successful you will have an advanced degree that enables you to support your family. I just got off of a sixteen hour shift at a long term care facility which is primarily Medicaid supported where I had to care for TWENTY TWO residents during my shift. Those people for the most part are COMPLETELY dependent upon the federal/state government to pay for their horrible existence (to the tune of about 50K per year per resident for a really BAD facility). Do you think that if you asked one of them (one of the more lucid ones) if they would have considered utilizing credit card financing if it enabled them to have a career which might have facilitated long term self sufficiency they would have responded in the negative due to concerns over cheating? I am not really interested in helping those like myself with high GPA's and relatively fortunate financial circumstances. Rather, I am speaking to those "on the edge" who might otherwise not have the same opportunities to access the "American Dream". Thus, my bottom line is that it is far better to use credit card financing than to pass up an opportunity to go to school if that is your only reasonable option. Paying these loans back shouldn't take much more than a YEAR after you become a CRNA, if you are willing to live frugally (I plan on keeping my rusting, smelly 1994 Toyota with 300K miles essentially forever even if we earn 300k per year between us and told my wife that I would be content to live in a cheap mobile home or apartment so long as it is on Oahu).

    In addition, your credit can return to an "above average" status within three years at most providing you take the appropriate actions. In addition, there is something to be said for the "option of defaulting" which effectively doesn't exist with governmental student loans, even if you never utilize this option. Consider also that Stafford Loans are almost like a form of "welfare" in the sense that they are subsidized to an artificially low interest rate, and repayment terms by other peoples tax money (perhaps I should climb down from my high horse since I take Pell grants and Stafford loans myself!). Thus, in the sense that credit card loans emanate entirely from the private sector one COULD make an ethical argument for their superiority. Dave, I say drink the club soda and then club the seals, cook them over a hot fire and eat if that is what it takes to properly feed your family (actually that may be a bit over stated I really do like seals so my family would have to be pretty darn hungry before clubbing would be an option). As for the "bad taste" argument I like going to the theatre and symphony all most every other weekend. However, I always wear blue jeans, simple shirts, and a ball cap (this applies to nice restaurants and our wedding as well!) My wife constantly decries my "bad taste", but the bottom line is that despite such accusations I still have a really good time, and unlike many of the "high brow" people who attend such venues I actually go for the "subject matter at hand" rather than to be seen or socialize.
    Last edit by Roland on Mar 16, '04
  10. by   Erin RN
    Quote from Roland
    No, I am not saying that. Income qualification is a seperate and distinct issue. I'm not sure how Bank One deals with income (and others who offer graduate education loans), but I believe they will require a co-signer if you're not going to be working during grad. school. However, your CO-SIGNER will have to have acceptable credit scores which will probably be in the 700 plus range. Now YOU MAY be able to get around this requirement by applying for other signature type loans before starting school if you do not bring up your "imminent eduation plans", but then these would just be regular signature (not higher education) loans.

    For someone with good credit, but NO co-signer or other options (and in a position where Stafford Loans won't be enough) you COULD consider giving "yourself" a loan from credit cards. At one time I had about two hundred thousand in available credit, and there was nothing to "stop me" from cash advancing most of that money and using it for school. Of course this would probably mean trashing your credit while in CRNA school since you wouldn't be able to pay the minimums. However, when you graduated you would have at least three options:

    a. Pay the credit cards with your now much higher income from being a CRNA. This is the most honest, but also the most financially distressing approach since you will be paying late fees in addition to high interest rates (and your credit will still be damaged, ironically perhaps more than from filing a BK since you will continue to show late, closed accounts until they are paid in full).

    b. Use one of the many credit counseling programs modeled on Consumer Credit Counseling which freeze or vastly lower the interest on the credit cards and waive most of the late fees (these programs also hurt your credit, but probably no worse than it will already be by this time, and they will save you tens of thousands in interest and fees).

    c. File a chapter Seven Bankruptcy. Providing that you have not already started a high paying job which might cause the court to throw out your case (thus you would want to file at the end of your last semester). In addition, it shouldn't appear to the court that this was your intention from the start since that would constitute grounds for dismissing your case (thus you should make the minimum payments for at least six months after getting the "loans"). This plan also suffers from the weakness that if Bankruptcy reform is passed while you are in CRNA school the loans might very well no longer be dis-chargable in Chapter Seven proceedings (you could use one of the above plans or file a chapter thirteen). Of course this course of action raises numerous moral and ethical considerations (of course that doesn't stop major corporations from employing similar strategies on a daily basis). However, it has the advantage of essentially giving you a "free" (at least in terms of money) CRNA education. Keep in mind that usually, unless you are permanently disabled government backed student loans CANNOT be discharged in a chapter Seven BK. As always consult your attorney for further details (one that also deals with the mob or major corporate interests would be especially useful).

    Roland

    I have to say that option c is over the top..and VERY irresponsible!! I would not wish anyone that was that irresponsible to be putting me under anesthesia!! Besides that, I have worked healthcare jobs where a credit check was run..if a bankruptcy came up I am guessing I would not have been offered the job. Erin
  11. by   Gump
    Roland. I think you make a very valid point; using extreme examples, but a valid point indeed. In fact, I'm sort of in that situation, except I will not have to use any credit cards. I agree that one should do whatever he/she can to accomplish their goals; do what it takes to be happy. Don't just 'settle' for something.
  12. by   tennyson
    I'm with you on that one.


    Quote from Gump
    Roland. I think you make a very valid point; using extreme examples, but a valid point indeed. In fact, I'm sort of in that situation, except I will not have to use any credit cards. I agree that one should do whatever he/she can to accomplish their goals; do what it takes to be happy. Don't just 'settle' for something.

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