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Are student loan interest rates to high?

Are student loan interest rates to high?


  • Total voters
    43
If your wife has a 13% Sallie Mae loan, it's because she is deemed a credit risk.

The interest constantly changes. For instance, it was high up to 08, they dropped down post 08, and are climbing again now. And as said, they range from low to high. Her credit is actually very good.
 
I don't even understand what you're trying to say. How do lower interest rates lead to high rates?

Higher monthly rates, as in instead of paying $150 per month a person may pay $200. For some, that just isn't an option.


And how does the DoE take in tens of billions of dollars from "struggling young citizens"? The "struggling young citizens" want to borrow money from the government (which should not be in the lending business to begin with) or government sponsored entities. What is the Constitutional right that "struggling young citizens" have to cheap loans from the government - or anyone for that matter?

What on Earth does this have to do with the Constitution? Congressmen set the interest rate. Why not make it more manageable? It astounds me how much you are trying to justify the federal govt trying to squeeze more money from the citizens.
 
The interest constantly changes. For instance, it was high up to 08, they dropped down post 08, and are climbing again now. And as said, they range from low to high. Her credit is actually very good.

If her credit is good, she can refinance that 13% loan with a personal unsecured loan to a lower rate.
 
Higher monthly rates, as in instead of paying $150 per month a person may pay $200. For some, that just isn't an option.




What on Earth does this have to do with the Constitution? Congressmen set the interest rate. Why not make it more manageable? It astounds me how much you are trying to justify the federal govt trying to squeeze more money from the citizens.

Low interest rates lead to high interest rates. That's what you said. What the hell does it mean (and no, your explanation above doesn't do it)?
 
Please quote it if I said that.

I'm sorry. I've been trying to get you to explain yourself for so many posts I forgot what you originally said. Here it is:

I am talking about through government. Refinancing through a private institution may help lower interest rates but usually means higher monthly rates.

<snip>

So let me try again. How does lower interesting rates lead to higher monthly rates?
 
I know a lot of people who started paying their student loans 9 months after graduating and starting their new jobs. Nobody said it was easier for new graduates to pay, but pay they did. In fact, most of them do pay, as agreed, and on time.

As far as the inflation discussion, I wasn't talking about inflation in terms of the impact on the borrowers, but rather inflation as it impacts the lenders who would be holding on to loans at very low rates for too long.

True student loans are made by the government now. This is an Obama change.

But lot's of people borrow private (non governmental) money and use the proceeds for living expenses or for a car and then pretend like that was a student loan. That's why so many people claim to owe far more than the federal student loan cap. If someone borrows money and blows it, I don't really consider it a student loan, I consider it stupidity on their part.
 
If her credit is good, she can refinance that 13% loan with a personal unsecured loan to a lower rate.

Hmmmm...

Ok, since you appear to know something about it, let's see if you can help shed some light on what that actually means in a practical sense. IF I recall correctly, average student indebtedness is around $27,000. What FICO score would you need to get an unsecured loan of $27,000.00?
 
Hmmmm...

Ok, since you appear to know something about it, let's see if you can help shed some light on what that actually means in a practical sense. IF I recall correctly, average student indebtedness is around $27,000. What FICO score would you need to get an unsecured loan of $27,000.00?

Not sure how helpful this would be for that question, but...

Personal Loans – Top 10 Personal Loans

Some of the listed max rates are insane

450%?!?!?
 
Last edited:
Not sure how helpful this would be for that question, but...

Personal Loans – Top 10 Personal Loans

Some of the listed max rates are insane

450%?!?!?

That was a stab at it, but I don't think that those were unsecured loans. I highly doubt a lender would give someone an unsecured loan of $30000 to someone with a FICO score of 560.
 
I would assume they are what they appear to be. Do you think the loan servicers are paid up front for 30 years of loan servicing, since loan fees are applied to the whole loan amount?

Do you think the fees are insufficient to service the loan? Does a $100000 loan cost more to service than a $10000 loan if both borrowers pay on time?

And what about the 8.5% loan rate you have been referring to? That rate only applies to a small percentage of the student loans being generated. I think you lose some credibility to your argument when you try to suggest all student loans fall into that category, with 6% spreads.

I don't think that the argument loses credibility because nowhere did I say all loans fall into that category. I think that your argument losses credibility when you suggest that I said something that I did not say. Furthermore, I gave a whole list of rates and spreads in a subsequent post.
 
True student loans are made by the government now. This is an Obama change.

But lot's of people borrow private (non governmental) money and use the proceeds for living expenses or for a car and then pretend like that was a student loan. That's why so many people claim to owe far more than the federal student loan cap. If someone borrows money and blows it, I don't really consider it a student loan, I consider it stupidity on their part.

You can't pretend a private loan is for student loan purposes if it isn't. That law also changed when the law was changed to take private lenders (with the exception of one bank somewhere in the Midwest) out of student loans. If you borrow from a private lender to pay for education, the purpose of the loan has to be defined in the note as "education". Those same lenders are required to disclose competitive information about education loans with the disclosures. It compares the loan they are making with the federal programs. It was a change to Regulation Z in 2009.
 
Hmmmm...

Ok, since you appear to know something about it, let's see if you can help shed some light on what that actually means in a practical sense. IF I recall correctly, average student indebtedness is around $27,000. What FICO score would you need to get an unsecured loan of $27,000.00?

You have to ask the lender. All lenders have different credit score requirements. There is no blanket answer to that.
 
You have to ask the lender. All lenders have different credit score requirements. There is no blanket answer to that.

You were the one that suggested that an unsecured loan could be obtained with good credit. So what do you think "good credit" means for an unsecured loan, since you think that is practical?
 
You were the one that suggested that an unsecured loan could be obtained with good credit. So what do you think "good credit" means for an unsecured loan, since you think that is practical?

One more time. You have to ask the lender. They all have different FICO score requirements. One may require 720 and one may require 750 and one may require 810.

You can Google some banks in your area and ask each one of them.
 
Do you think the fees are insufficient to service the loan? Does a $100000 loan cost more to service than a $10000 loan if both borrowers pay on time?



I don't think that the argument loses credibility because nowhere did I say all loans fall into that category. I think that your argument losses credibility when you suggest that I said something that I did not say. Furthermore, I gave a whole list of rates and spreads in a subsequent post.

I don't read every post in a thread, so sorry if I didn't catch that you posted all the rates, etc. in some subsequent post. In every post to me, and that I've seen, you've mentioned 8.5%, and 6% spreads.

"However it forces parents to pay as much as 8.5 percent for a loan."​

I don't know what it costs to service a loan. Do you know what it costs, other than what appears to be a feeling you have?

Bottom line, you have your opinion, and I have mine. We'll just have to leave it at that.

:peace
 
One more time. You have to ask the lender. They all have different FICO score requirements. One may require 720 and one may require 750 and one may require 810.

You can Google some banks in your area and ask each one of them.

Well, according to this SOURCE 720 or better is good. By that criteria I have good credit, at least the last time my credit was run, which was in December. However something tells me that one would need quite a bit more than that to obtain a $27,000 line of unsecured credit. As such, my response to you is that obtaining such a line of credit is not a practical option, for most borrowers.
 
I don't read every post in a thread, so sorry if I didn't catch that you posted all the rates, etc. in some subsequent post. In every post to me, and that I've seen, you've mentioned 8.5%, and 6% spreads.

"However it forces parents to pay as much as 8.5 percent for a loan."​

I don't know what it costs to service a loan. Do you know what it costs, other than what appears to be a feeling you have?

Bottom line, you have your opinion, and I have mine. We'll just have to leave it at that.

:peace

No problem ocean. Thanks for the discussion. I hope we can have more in the future.
 
Well, according to this SOURCE 720 or better is good. By that criteria I have good credit, at least the last time my credit was run, which was in December. However something tells me that one would need quite a bit more than that to obtain a $27,000 line of unsecured credit. As such, my response to you is that obtaining such a line of credit is not a practical option, for most borrowers.

So once again, you have to ask your lender. How many times do I have to say that before you understand it?

If you need a $27,000 unsecured credit line, ask for it. I'm not your bank advisor.
 
So once again, you have to ask your lender. How many times do I have to say that before you understand it?

If you need a $27,000 unsecured credit line, ask for it. I'm not your bank advisor.

I did not ask for your financial advice.

What you did was suggest that someone could refinance a 13% loan with an unsecured loan at a cheaper rate. So again, that is something that is not a practical option for most borrowers. How many times do I have to say it before you understand it?
 
You can't pretend a private loan is for student loan purposes if it isn't. That law also changed when the law was changed to take private lenders (with the exception of one bank somewhere in the Midwest) out of student loans. If you borrow from a private lender to pay for education, the purpose of the loan has to be defined in the note as "education". Those same lenders are required to disclose competitive information about education loans with the disclosures. It compares the loan they are making with the federal programs. It was a change to Regulation Z in 2009.

I'm not doubting that, but I have seen many articles where people have claimed to owe massive amounts of "student loans", then when you read further it's quite clear that what they are calling "student loans" wouldn't fit anyone's definition of a student loan (public or private). In one article, the person claimed that her home mortgage was education related because since she was going to be attending college for at least 4 years she thought it made sense to purchase a home in that community.

What I am saying is that it's popular for people to blame student loans for their debt problem, even when their debt problem has little to do with student loans. They get sympathy by claiming it's student loans, when in reality if was a car loan, or credit card money that they simply blew.

Students Loan Debt Horror Stories - Business Insider

Students Loan Debt Horror Stories - Business Insider
 
I did not ask for your financial advice.

What you did was suggest that someone could refinance a 13% loan with an unsecured loan at a cheaper rate. So again, that is something that is not a practical option for most borrowers. How many times do I have to say it before you understand it?

Because you can. You can take a loan against your home. You can take a loan against your 401K. You can pledge life insurance or CDs or other things for collateral. You can take a credit line. You can take an installment loan. And anyone with good credit can get a loan cheaper than 13%. You have to find the lender that will give it to you. Most community banks and credit unions can and will make a personal unsecured loan for as much as $50,000. You have to ask what their credit requirements are for every loan type they make, and every loan dollar amount they make. As I told you at the beginning.

You have to do your own research on things, and you can not make a blanket statement that it isn't a "practical option for most borrowers. You are not privy to the financial status nor the credit rating of most borrowers.
 
I'm not doubting that, but I have seen many articles where people have claimed to owe massive amounts of "student loans", then when you read further it's quite clear that what they are calling "student loans" wouldn't fit anyone's definition of a student loan (public or private). In one article, the person claimed that her home mortgage was education related because since she was going to be attending college for at least 4 years she thought it made sense to purchase a home in that community.

What I am saying is that it's popular for people to blame student loans for their debt problem, even when their debt problem has little to do with student loans. They get sympathy by claiming it's student loans, when in reality if was a car loan, or credit card money that they simply blew.

Students Loan Debt Horror Stories - Business Insider

Students Loan Debt Horror Stories - Business Insider

Ah, I got you now. And yes, you're 100% right. I've heard of people who say they can't pay their student loans back, while driving a 1 year old cherry red Audi and carrying a Prada purse.
 
You have to ask the lender. All lenders have different credit score requirements. There is no blanket answer to that.


more than just credit scores will determine if eligible

are co-signors available?

are there any assets available to be used as security?

what terms is the borrower looking for? ie 5 yr payback, 10 year, etc

what income and debts does the borrower have

there is a LOT that goes into the decision....

my daughter refinanced hers just a few months back

she got 3% or close to it.....but a shorter term to payback
 
more than just credit scores will determine if eligible

are co-signors available?

are there any assets available to be used as security?

what terms is the borrower looking for? ie 5 yr payback, 10 year, etc

what income and debts does the borrower have

there is a LOT that goes into the decision....

my daughter refinanced hers just a few months back

she got 3% or close to it.....but a shorter term to payback

Income is also one of the most important issues, it's been my experience that borrowers have to be able to prove that they can (currently) handle the payments, and banks don't go for speculative income. That's why I don't understand how anyone can manage to get a student loan from a bank without there being some sort of guarantor. Few full time students are going to have a significant income and the prospect of a potential future degree in no way indicates that the student will ever have a decent income.
 
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