So, at one of my interviews, the guide was telling us how we should avoid going into too much debt while applying to med school. Hmmm… He said if we maxed out our credit cards, that would make it much harder to be approved for student loans. Well, I have 2 questions that I wondered if anyone could answer:
1) What if I just get a credit card with a higher limit? Then I won’t be “maxed out”… But somehow I can’t imagine I’m the only person who’s thought of that. Do they do some kind of debt-to-income ratio? In that case, will they use my income from this year or next year (when it would be zero if I start med school)?
2) Do federal student loans decline potential borrowers because of high credit card debt? Or do only private lenders do that? (Most likely I’ll need both anyway, but I’m just curious).
I don’t see how I can apply to medical school, period, without taking on some credit card debt. It’s so expensive!
Okay, I am not an expert on med school financial aid, but I can safely say I have been blessed with financial aid for undergrad and federal loans are never based on credit - only need. Which means you have to prove you need it by submitting an application and hard copy of your previous year’s tax return. And then sometimes you are selected for review and you have to submit your tax return to your school for verification as well. Hope that helps.
I don’t ever being asked how much debt I was already carrying when applying for financial aid. That is important for mortgages and car loans, but not for school money. I sometimes think that might not be the best way to run things, but it’s the way it works. Still, is a good idead to keep those credit cards as low as possible as it isn’t going to get easier to pay them off for a while.
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Okay, I am not an expert on med school financial aid, but I can safely say I have been blessed with financial aid for undergrad and federal loans are never based on credit - only need. Which means you have to prove you need it by submitting an application and hard copy of your previous year’s tax return. And then sometimes you are selected for review and you have to submit your tax return to your school for verification as well. Hope that helps.
Adtually federal loans for med school aren’t even necessarily based on need. You will need to show need to qualify for a subsidized Stafford loan but there is no income beyond which you do not qualify for an unsub loan.
Also know that for federal student aid (e.g. Stafford loans, both subsidized and unsubsidized), you will be able to waive the requirement to submit parental information if you choose. This will NOT be an option if you apply for scholarships or other SCHOOL-based (as opposed to Federal) aid.
Pushkin, the presenter must have been talking about private student loans - the things you should try to avoid having to get. You can borrow almost $40K/year through the Stafford loan program; if you go to an expensive private school, you are going to need to borrow beyond this limit and that is where the credit card debt and loan qualification comes in. Not for the Federal stuff.
Hope I haven’t muddied the waters further.
Mary
who needs to get my loan consolidation and grace period applications DONE
Hi, I have just gone through an eye opening experience with private student loans. Yes it would mess you up to have charge cards to the limit. To give you a good credit score you want 30% or less charged on each card. Raising the limits would help. If you have too much outstanding CC debt then it could be a problem. Any Charge offs on you credit report would be a problem. You need a FICO of about 650 or more for approval. Two of the private lenders I have delt with are Key and Terri. Key looks at Equifax and Terri looks
at Transunion credit reports. Others such as Wells Fargo and Citi bank offer priviate loans. The key to loans is good credit. I found www.creditboards.com helpful. I hope this helps. Bill 
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Hi, I have just gone through an eye opening experience with private student loans. Yes it would mess you up to have charge cards to the limit. To give you a good credit score you want 30% or less charged on each card. Raising the limits would help. If you have too much outstanding CC debt then it could be a problem. Any Charge offs on you credit report would be a problem. You need a FICO of about 650 or more for approval. Two of the private lenders I have delt with are Key and Terri. Key looks at Equifax and Terri looks
at Transunion credit reports. Others such as Wells Fargo and Citi bank offer priviate loans. The key to loans is good credit. I found www.creditboards.com helpful. I hope this helps. Bill
Thanks. By the way, what is a “charge off?”
Are you sure that just changing from, say, a credit card with a $1000 limit and a balance of say, $950, to a new card with a limit of $10,000 and the same balance of $950 would actually improve my chances in applying for private loans? I mean, it seems like they’d be on to that.
Here is another idea I have: have one of my employed friends (or parents) transfer my balance onto one of their credit cards while I apply for the loans, then transfer the balance back once I’ve gotten a loan. I’ll have to live frugally of course so that I can actually work towards paying it off.
My third idea is to get a cosigner. Would that override any credit issues?
I will most likely need to take out all the loans I can get, unless I get some financial aid.
A cosigner with good credit will take care of the problem if you need to go the route of a private loan. A charge-off, as I understand it, is when the credit card company closes the account and absorbs the balance due to them as a write-off. I imagine it looks really bad on the credit.
Yes, a charge off is a baddie, it is when any debt, cc, phone bill, unpaid milk money, car loan, is not paid and reported on
the credit report as a collection/ bad debt/ charge off. It will still be a charge off even if paid. If you have one on your credit report and want it gone and it has not been paid then what you do is write who you owe and offer payment and ask for the charge off to be taken off otherwise it stays for 7 years! 