Fed Financial
Student loans, help!?
I really need some help with student loans. I have been to many people to help me but no one knows the right information. My parents want to get a personal student loan and I was looking at one through citibank but I don't understand how the interest rates work. How much will I owe after 20 years? Also, do you get the whole loan right away, or is it in payments? I really need some help!
Public Comments
- What is your email? I can send you an attachment containing an explanation of several loans like you are wanting. Or just email me pruiam@yahoo.com
- Parent student loans are called PLUS loans. To apply for them first you must fill out a fafsa at www.fafsa.ed.gov and then your school will give you the information to do a plus loan. Here is a good publication about loans. It also includes the interest rates of the PLUS loans and the payment terms. PLUS loans to parents are not eligible for deferment while you are in school. In other words, the month after your parents get the money, they will have to make payments. Also, since the money goes to them, not you, they are responsible for making payments not you. You can do your own loan if you don't want your parents to do it for you. They are called Stafford loans. Good Luck.
- The citibank and other private loan interest rates work like this: There is something called a "prime rate" which is set by the federal government. I don't know what it is right now (you can google it and find out), but let's say the prime rate is 5%. Depending on your parent's credit, they will be charged the prime rate (5%) plus whatever interest they get from citibank based on their credit score (lets say 3% if they have really good credit). So the total amount of intrest that is added to your loan amount EACH year is 7% of what you borrowed. How much you are after 20 years depends on how much you take out and what the interest rate is. There are loan calculators on the internet, just Google "student loan calculator" and they will tell you how much you owe after 20 years. Payments are made per-semester directly to the school. So if you want $10000 per year, the first semester you get $5000, the second semester another $5000.
- there is a site at www.studentloanassistance.net that contains a large amount of free information that could be usefull to you.
