Interest rates, next 10 years.

[scaredyclassic]

Thinking about taking loans for some of my last kids college.

1.5 to 2% variable.

Pretty low.

I figure if it goes up i can just pay it.

At 1.5 perc. Though, i think id rather stay liquid.

I assumed rates would be high by now, but im thinking if anything they’re going down?

[Coronita]

Is there a cap on the variable rate?

There’s a high probability of student loan debt forgiveness in the future, so why not.

[zk]

[quote=Coronita]Is there a cap on the variable rate?

There’s a high probability of student loan debt forgiveness in the future, so why not.[/quote]

I don’t think the 1.5% loan he’s talking about is a student loan.

Please correct me if I’m wrong. I would be down for that.

If it’s not a student loan, what kind of loan is it?

If it is a student loan, what kind of student loan is it?

[Coronita]

Yes, you can use a 529 to pay a student loan, but only up to $10k per lifetime per person.

https://www.investopedia.com/articles/personal-finance/020217/can-i-pay-student-loans-my-529-plan.asp

[scaredyclassic]

[quote=zk][quote=Coronita]Is there a cap on the variable rate?

There’s a high probability of student loan debt forgiveness in the future, so why not.[/quote]

I don’t think the 1.5% loan he’s talking about is a student loan.

Please correct me if I’m wrong. I would be down for that.

If it’s not a student loan, what kind of loan is it?

If it is a student loan, what kind of student loan is it?[/quote]

Sallie maes website currently says as low as 1.49 variable student loans. I havent read the fine pront.

https://www.salliemae.com/

[Coronita]

[quote=scaredyclassic][quote=zk][quote=Coronita]Is there a cap on the variable rate?

There’s a high probability of student loan debt forgiveness in the future, so why not.[/quote]

I don’t think the 1.5% loan he’s talking about is a student loan.

Please correct me if I’m wrong. I would be down for that.

If it’s not a student loan, what kind of loan is it?

If it is a student loan, what kind of student loan is it?[/quote]

Sallie maes website currently says as low as 1.49 variable student loans. I havent read the fine pront.

https://www.salliemae.com/%5B/quote%5D

So I’m curious about this, since it’s going to be something on my mind in 4-5 years. The thing I find disturbing though…. It’s really hard to find the fine print concerning the 1.25% variable rate loan, beyond that you must have some auto-pay feature enabled to get the lowest rate.

That in itself is troubling for me. If the offer was really good, the fine print should be easily found….

Why do I get the feeling that student loans are as predatory as credit cards….

[Coronita]

You are in for a treat…Real time chat with a Sallie Mae agent since none of the details of that 1.25% variable rate loan I could find anywhere… And so far, the agent isn’t being clear about it either… (Fake name Frank used)

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Info at 12:10, Jun 4:
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Automated Advisor at 12:10, Jun 4:
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Automated Advisor at 12:10, Jun 4:
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frank at 12:10, Jun 4:
Where can i find the fine print for the 1.25% variable rate loan?
Automated Advisor at 12:10, Jun 4:
Your question will help me improve, but I don’t have that answer. Please be patient while I connect you to our next available Sales Specialist. Our wait times are currently longer than usual.

Info at 12:11, Jun 4:
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Info at 12:11, Jun 4:
You are now chatting with Danielle.
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frank at 12:11, Jun 4:
It seems like the details of the 1.25% variable rate loan is intentionally not easily found.
frank at 12:11, Jun 4:
Why>
Danielle at 12:11, Jun 4:
Thank you for using Sallie Mae Live Chat. You are now chatting with a Live Specialist.
Can you please elaborate what details you are looking for?
frank at 12:12, Jun 4:
I want to know how long is the 1.25% rate last, what is the maximum APR (is it capped), etc…you know the usually things that someone that’s going to take out a variable loan wants to know about that many lenders intentionally hide.
frank at 12:12, Jun 4:
Also any pre-payment penalties.
frank at 12:13, Jun 4:
There’s got to be some terms and conditions document.
Danielle at 12:13, Jun 4:
Your specific rate will vary based on the loan product selected. If your loan offers rate and repayment options, your rate may also vary based on your selection.
If your loan has a variable rate, the maximum interest rate your loan could adjust to is 25%.
Danielle at 12:13, Jun 4:
There is no prepayment penalty.
frank at 12:13, Jun 4:
How is the variable rate indexed
frank at 12:13, Jun 4:
how does it change
frank at 12:13, Jun 4:
Let’s say I qualify for the 1.25% apr rate
frank at 12:14, Jun 4:
(I will)
frank at 12:14, Jun 4:
How long does my rate stay 1.25%
Danielle at 12:14, Jun 4:
It is based off the one month LIBOR. Our variable rate index is based on the one-month LIBOR and can change on a monthly basis on the 25th of each month.
Danielle at 12:14, Jun 4:
If you choose variable, it can potentially be for just one month.
frank at 12:15, Jun 4:
So is it always libor + (rate amount)
frank at 12:15, Jun 4:
is the (rate amount) always the same
frank at 12:15, Jun 4:
or can that change?
frank at 12:15, Jun 4:
Assuming I always pay on time
Danielle at 12:16, Jun 4:
I’m not sure what you mean by will it always be libor plus rate amount. The rate will be based off the LIBOR. Interest rates are calculated by our system based on your creditworthiness and/or application data. An applicant’s creditworthiness takes into
account factors such as:

– A positive payment history;
– Length of time since credit was established; and
– Amount of outstanding debt.
frank at 12:17, Jun 4:
Understood. Let’s use an example. I have close to an 800 credit score, I have $100k/year annual income I always pay on time.
frank at 12:18, Jun 4:
I take out a loan loan for $100k on /62020 at 1.25%
frank at 12:18, Jun 4:
libor states constant
frank at 12:18, Jun 4:
for the next 4 years
frank at 12:18, Jun 4:
What is my loan rate look like over the next 4 years.
Danielle at 12:19, Jun 4:
Since income was mentioned, I do need to state you do not need to reveal alimony, child support, or separate maintenance income if you do not wish to have it considered as a basis for loan repayment. The only way to know what rate you would receive is to apply. I can collect some information to go over a range of rates but that is as specific as we can get. I would not be able to say what it would look like over the next four years. You can see history of the LIBOR at bankrate.com .
frank at 12:20, Jun 4:
I just want to understand what are the factors that would make the variable rate increase if libor rate stays constant, I always pay on time, my credit score and income doesn’t change.
frank at 12:21, Jun 4:
(IE, is this 1.25% only a teaser rate…)
Danielle at 12:21, Jun 4:
If LIBOR stays constant, it should not change. Once a variable rate is received, it will only change when LIBOR does.
frank at 12:21, Jun 4:
All this would be clear in a document that mysteriously is absent on any website.
frank at 12:22, Jun 4:
Current libor rate is 1.80%
frank at 12:22, Jun 4:
Your offer is 1.25%
frank at 12:22, Jun 4:
Are you saying that the variable rate will always be -0.55% libor, assuming nothing else about me changes?

Danielle at 12:23, Jun 4:
I cannot guarantee that. It is LIBOR plus a margin. I cannot know what rate you will receive or all the ways it can possibly change. We are here to answer questions about the loan products and process but we are not credit experts or financial advisors.
frank at 12:25, Jun 4:

Do you have a document that describes the loan terms that i can read
frank at 12:26, Jun 4:
So basically you are saying that margin above/below libor could change anytime, even if nothing with my financial/credit worthiness changes?
frank at 12:27, Jun 4:
I’m just trying to understand under what circumstances it would change if my financial/credit worthiness does not change.

Danielle at 12:29, Jun 4:
I’ll be right with you.
frank at 12:29, Jun 4:
k

frank at 12:29, Jun 4:
k
Danielle at 12:30, Jun 4:
If your financial/credit worthiness does not change, the only reason it would change is LIBOR. I cannot state how much it will change or what it will look like in four years. There is a calculator you can play around with under college planning and then Tools. There is not a document that describes the loan terms as there are multiple variables such as the loan product, the LIBOR, if you make payments early ( there is no prepayment penalty), if there was a late payment. If nothing in your credit changes, the variable rate should only change with LIBOR.
frank at 12:31, Jun 4:
Is that a guarantee? That if my credit/finances does not change and I always pay on time, and libor does not change, then my loan rate should never change from 1.25%?

Danielle at 12:32, Jun 4:
It is not guaranteed.

frank at 12:33, Jun 4:
Ok….. So dumb question. Could you give me one example of how my rate could change even if my credit/finances does not change, I always pay on time, libor does not change?

Danielle at 12:35, Jun 4:
Our rates are among the most competitive in the private student loan market and we work to ensure that all our customers receive a fair and competitive price.
From time to time, our pricing criteria may change based on the current market, rate environment, and other factors. Changes to your credit history and/or application data can also affect your rate.
frank at 12:35, Jun 4:
Sorry, again if there was a document that describes this, it would be a lot easier for me to understand. I’m financially literate, but I can’t imagine for most of the people who are not, how they could ever understand these terms.

[scaredyclassic]

I wonder if this violates any truth in lending laws.

[Coronita]

Frank at 12:37, Jun 4:
Can you give me an example i the past where a loan rate has changed because the “pricing criteria” changed, but libor didn’t change, and the person’s financial/credit worthiness did not change?
frank at 12:37, Jun 4:
(in the past)

[Coronita]

God damnit they seem to be dancing around the same damn question for a long time… I’m still on the chat channel with them…

[Coronita]

Danielle at 12:38, Jun 4:
We would not have that information available. Once an application is submitted, if approved, you will receive an interest rate offer. If you choose variable, it can increase or decrease over the life of the loan. I cannot say every factor that may contribute to a change. Your specific rate will vary based on the loan product selected. If your loan offers rate and repayment options, your rate may also vary based on your selection.
If your loan has a variable rate, the maximum interest rate your loan could adjust to is 25%.

[Coronita]

Danielle at 12:38, Jun 4:
We would not have that information available. Once an application is submitted, if approved, you will receive an interest rate offer. If you choose variable, it can increase or decrease over the life of the loan. I cannot say every factor that may contribute to a change. Your specific rate will vary based on the loan product selected. If your loan offers rate and repayment options, your rate may also vary based on your selection.
If your loan has a variable rate, the maximum interest rate your loan could adjust to is 25%.
frank at 12:41, Jun 4:
Wow… So let me summarize how this loan works. You want me to apply for a variable loan that starts at 1.25% and is capped at 25% (credit card bend over rate), without any detailed description on how that variable rate could rise from 1.25% to somewhere 25%, even if nothing in my credit/financial situation changes, nor if libor changes, and if I always pay on time…..
frank at 12:41, Jun 4:
I’m sorry to say this, this is absolutely the worst loan idea ever. Probably worse than any used car loan or credit card offer, because at lease with those loans, if I’m going to bend over, at least I’m told up front.
frank at 12:42, Jun 4:
Thank you.
frank at 12:42, Jun 4:
But no thank you.

(agent disconnected before I could finish)

Danielle at 12:42, Jun 4:
Thank you for choosing Sallie Mae. To start an application, click here. To complete a brief survey about your chat experience, click here.

[Coronita]

So there you go scardey…

(You’re welcome…)

I’m really disappointed she disconnected before I had a chance to send her the link to this thread. Damnit!

I know, I know… Such an ahole FLU thing to do…

But someone’s got to do it!

[scaredyclassic]

[quote=Coronita]So there you go scardey…

(You’re welcome…)

I’m really disappointed she disconnected before I had a chance to send her the link to this thread. Damnit!

I know, I know… Such an ahole FLU thing to do…

But someone’s got to do it![/quote]

thanks

this is probably illegal for everyone but Sallie Mae to do.

I hate student loans. hate them with a seething passion. I recently paid mine off after 25 years. that includes a few very shaky bad years toward the beginning of the loan period. I mean, being a responsible fellow, it actually took a toll on my health.

But i didnt want to let my prejudice stand in the way of a screaming deal, if that’s what this was.

my hatred continues to burn unabated. motherfuckers! if there were a way to riot and loot against student loans, i might. but it’s like railing against capitalism, or the sun. it’s justa fixture of reality.

curse you, sun, we need more moon!

[gzz]

I am somewhat familiar with the various student loan forgiveness programs, I don’t think any of them apply to private loans taken by parents.

6% loan by student that might be forgiven seems better than 1.5% by parent that can’t.

I used the direct loan/stafford program, entirely my loans not parents. They were 2 to 4% when taken out, and the “subsidized” ones just meant no interest while I was in school. When I graduated, I consolidated them into a direct loan at 2.8% 30 year direct loan. (One year I got a 5k 5% loan direct from my university which I paid off immediately upon working because of the high rate).

My entire debt of about 100k at graduation could have been forgiven by working for either the government at any level, OR a non-profit, OR simply by being poor. None of those ultimately applied, but the chance of one of them applying to your child is decent, not to mention additional programs.

During the start-up phase of my business, I deferred and capitalized all my payments for about 2.5 years. It took about 3 minutes to make the request online, and it amounted to about a 10k startup loan at 2.8%.

[Author]

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