Hello Everyone,
I am feeling the pinch of being an older medical student. Our school budgets us $1900 a month to live off but there are a few catches… Once you pay for necessities it isn’t $1900 because they say, “If you can save in this area it gives more in area X, Y, or Z”. Also they don’t budget for the one summer break that we get so I will be without my “$1900” for the months of June, July and part of August as our loan money comes weeks after we start school.
Of course I cannot rely on parents or a trust fund during this time and intended to save more money during the semester but car expenses and other things happened. I DO have some mutual funds with strict withdrawal guidelines and a life insurance policy that I am trying NOT to cash in so I am not totally tapped out, I am just a bit nervous.
I am trying to procure summer employment but that may or may not happen due to a serious illness in the family.
Does anyone know of reputable private lenders? It wouldn’t be for a large sum of money less than $5000 (one that allows to pay back after school). I only want to use this in an emergency but it is nice to not have to scramble.
I won’t be in your situation for a few more years (assuming I get in) and don’t know if this will work for your situation, but how about a line of credit or a signature loan from LSU’s credit union? I’m sure LSU has a credit union. Only thing is that payments would start the very next month, not after school is done. However, if you only need it for those 3 months as an emergency fund and intend not to use the money, all you’ll be out is a few bucks in interest charges over 3 months. The line of credit I have with my college credit union is the best revolving line I have - the interest is below 5% compared to my credit cards which are between 9.99% and 14.99%. I have also used Discover Personal Loans many times for loans up to 5K at 9.99%.
I know Discover has some impressive rates for Medical School Loans, and they let you defer repayment until after med school. I’ve seriously considered going that route instead of federal loans as the interest rates are lower (the repayment options aren’t nearly as forgiving though). That said, they’re based on your school’s cost of attendance as well, so you might not be eligible for that specific program if you already have government loans.
You mentioned having some mutual funds, and I do know that if you have money in an IRA, you can withdraw from that early without penalty if you’re using the funds for an accredited higher education program. I’m planning on rolling my 401k into an IRA and dumping it entirely into med school tuition when I leave my firm in a few months.
There are a lot of private lenders out there. I’m not sure if there’s a “best” lender, though going with a well known name (i.e., a big bank or credit care company) is probably “safest.”
However, I recommend avoiding private loans if at all possible. I paid for much of my post-bac with private loans, so I’ve gone through this. They do have a lower interest rate to start with. But keep in mind that in most cases, it’s a highly variable rate. It might start at 4%, but the cap is probably somewhere around 20%. In terms of interest rates, federal loans are much safer. Additionally, with federal loans, you’re eligible for income-based repayment plans. The private loans I had for my post-bac didn’t offer that, which was a big deal when I had to defer. Remember that at the end of the day, these are for-profit companies that want to make money. That’s a very different attitude from the governement loan program. Just something to keep in mind. Although of course, sometimes it’s necessary to get one of these. I didn’t have a choice for my post-bac – the federal loans weren’t enough.
I hope things work out for you, Lucy.
Thanks everyone for the information and advice. LSU does have a credit union but we aren’t eligible for loans until residency. I managed to survive the summer and am hoping to hang on until January when we get our next loan check. There is always something coming up… At least my car will be paid for in February and there will be a bit extra money in the budget.
I am meeting with a pro bono wealth advisor on Tuesday after our test on Monday so hopefully he will be able to tell me what to do with my mutual funds as I have drained the IRA and we will see what do from there. I have money in a teacher’s retirement fund but he can tell me if I am vested or even if I can touch it.