Unsubsidized federal loan vs Private?

mrosev14 · Jul 17, 2008

I think as far as interest rates go, I am pretty sure the federal loans are better.

mnscotti · Jul 17, 2008

I'm in the same boat as you as far as these loans are concerned. I checked into private loans as I thought I could do better than the 6.8% fixed rate of the federal unsubsitized loans. IF you have excellent credit, and IF you are a bit of a gambler, you may be able to find something around 5%. That is what I learned from Chase Bank. That's really the only difference, federal loans are fixed and private ones are not. If you plan on paying it off in a year or two, then perhaps a private loan isn't a bad way to go.

RamaMama · Jul 18, 2008

Thanks for the helpfull info! I do have excellent credit but am not a gambler, so I think I'll just go for the federal loan. Thanks!

katkat75 · Jul 18, 2008

The federal loans are much better. The interest rates are going to be less than private loans. The only difference between subsidized and unsubsidized is that you'll be charged for interest while you're attending.

I'm not sure if you can ever defer private loans either. The federal loans are pretty easy to defer if you go back to school or have an economic hardship.

funfunfun · Jul 19, 2008

I was approved for half subsidized and half unsubsidized at a rate of 6.8% A friend of mine told me to call AAA, and I am glad I did. They have the best (around here anyway, MA) rates. I ended up getting a Stafford loan from them at (if I remember correctly) 4.3%. And then I think it drops even lower if you pay it off quicker...not sure my husband handled it. I just had to sign a waiver over to them and they sent all the paperwork into my school. Just call the 800 number and Student loans is one of the main options.

mnscotti · Jul 19, 2008

I'm a bit confused, how did your rate go from 6.8% to 4.3% for a Stafford loan? I thought it was fixed?

funfunfun · Jul 20, 2008

This is my 1st time ever taking out a loan and my husband handled all of the Q&A but her is what I did. I applied online for a Financial Aid, I did not get any money but did get approved for 1/2 of the amount subsidized and half unsubsidized at 6.8%...Is this called a grant or a federal loan or a grant pell (sp?)?? Not sure they told my husband all of this over the phone, they never sent me paperwork so unfortuately I can't go get it to read off of it. Then a friend told me to call AAA and they said they could give me a Stafford loan at 4.3%. They said it is something new AAA is offering and they are the lowest percentage around. Sorry I do not know all the exact details...call AAA 800-793-0508. Good Luck, let me know hoe you make out.

mnscotti · Jul 21, 2008

Thanks for the phone number. I just contacted them, and they just told me that last week they changed their policy and they can only offer a 0.25% reduction from 6.8%. She said it had something to do with the new legislation that forced them to stop offering the great rate you got.

So I just missed out it seems, so sad... :cry:

funfunfun · Jul 21, 2008

Your Kidding??!! I am so sorry that you could not get the same rate...sorry I got your hopes up. I hope my rate is locked in, I am going to call to double check. Thx for the update.