I wish more people took the time to really understand what it means to cosign. Somehow it seems they don't really believe they have legal liability for the loan.
Re: No fixed rate Student Loan
Tenacious
5/1/2012 8:45:29 PM
Student loans are under increasing scrutiny and my guess is they just are not as attractive as they once were. Relatively risky and potentially full of headaches,
Re: No fixed rate Student Loan
driven
5/1/2012 8:37:01 PM
Very interesting news, @Cat tail. What do you think caused the change in plans?
Re: No fixed rate Student Loan
cat tail
5/1/2012 8:20:27 PM
US Bank made a big deal out of the fact it planned to offer fixed rate student loans last summer. Now the bank has stopped issuing student loans at all -- and Chase plans to cut back.
After nearly 40 years in the student-loan business, Minneapolis-based U.S. Bancorp, the parent company of U.S. Bank, is no longer providing student loans, spokeswoman Amy Frantti said in an email.
JPMorgan Chase, the largest bank in the country, is sharply cutting back on its lending as well. Starting in July, Chase will only lend to students who are existing customers, spokesman Thomas Kelly told American Banker.
The federal student loans (limited to $5,500 to $7,500 annually) are a bit lower. But the unsubsized ones aren't a great bargain The current rate on Direct Subsidized Loans for Undergraduate students
is currently fixed at 3.4%.
The fixed interest rate on unsubsidized loans (meaning interest acrues while you are a student) is 6.8%.
Re: No fixed rate Student Loan
Value Hiker
5/1/2012 2:08:53 PM
Thanks for the information. It seems that student Loan rate is much higher than that of comparable mortgage. No wonder so many banks love the business. I think the government is subside the loan, shall the rate be lower?
I always shudder when an adult with good credit agrees to cosign for another adult with bad credit. If there is a reason no one wants to loan money to this person, why would you think he would make good on his debt this time? Odds are, the credit worthy adult will be stuck holding the bag. The empty bag, that is...
Risky to co-sign
ProfR
5/1/2012 1:59:09 PM
My father once co-signed a loan for a friend. My father did not understand exactly what the terms were. The friend defaulted and my father had to pay this off. It was not a student loan but it does show the risk here. You need to be very careful co-signing a loan and understand the risks.
Re: Good advice on the life insurance
Dex
5/1/2012 1:52:51 PM
Agreed @Street Smart. As crass as it may seem to insure the life of your child, you have to be realistic about the possibilities, howvever disturbing they may be to consider.
A few institutions offer fixed rate student loans but variable rates are by far more common.
- Wells Fargo offers one with a 15-year repayment term, 4-year deferment and a 6-month grace period. The APR ranges from 6.838% to 12.557%.
- PNC offers fixed rate loans with 15 year terms with APRs ranging from 7.09% to 13.79%.
- SunTrust offers fixed rate loans with APRs ranging from 3.751% to 11.356%. But that lowest rate is on a five year term with immediate repayment: On a $10,000 loan the monthly payment would be $183.90.
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