03.26.09 | Which Graduate Loan is Right For Me?
Lets play the Graduate student loan game!
Lets us assume you need to take out a loan for graduate school, which one of the following loan types would be best? Graduate Stafford, Graduate Plus, or Private Graduate Loan.
Answer, all of the above! It really depends on your criteria. Is your number one priority the interest rate? Is your primary concern the amount of money you can borrow? Are you looking for a loan that does not require stellar credit? Depending on how you answered those questions depends on which loan would be best for you.
The Graduate Stafford loan is a need-based loan which is tied to your FAFSA and holds a 6.8% fixed interest rate. The downside for many is that you are capped at borrowing just 20,500 per year.
The Graduate Plus loan has an 8.5% fixed interest rate, but allows you to borrower up to the cost of tuition less any financial aid you are receiving. This is generally viewed as a secondary option to the Graduate Stafford loan due in large part to the higher interest rate. The Grad Plus reviews your credit history for eligibility, and does not look at your FICO score. The eligibility criteria is one of the best selling points of the Grad Plus loan.
Private Graduate loans offer up the lowest interest rates in the market today for those with excellent credit. Of course the number of students and parents with excellent credit these days is very low. However, if you are in that exclusive club you may benefit. Many have secured loans in the 4% range.
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