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  1. #11
    Striving for balance Little Linguist's Avatar
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    Quote Originally Posted by Udog View Post
    There's also some funny business going on in the world of student loans, where students are being swindled into horrible interest rates via deceitful practices. It's a bit of a bubble that may be in danger of popping if a flux of students can't pay back their loans.
    I remember back in the day where I had to get student loans, there was a question on whether or not I wanted a floating interest rate. Of course, I said "Hell, no!!!" and chose the 5.25% fixed interest rate.

    Now imagine you were dumb and chose the floating interest rate (for the same reason people back in the day chose floating interest rates for mortgages). When the government prints money, the way they can control hyperinflation is to raise interest rates. Then, these people are screwed, especially if they haven't been able to find work due to the poor economy.

    Of course, you have the option of deferment for up to five years - that's the good news. By that time, the economy should come around, and things will be okay. But that still does not address the issue of the floating interest rate.

    When talking about bubbles, we must not forget the credit card bubble.

    The problem is not that someone has a student loan or a credit card or a car loan or a loan for commercial goods or a mortgage - the problem is when a person has a student loan, credit card bill, car loan, loan from XY company, charge card, AND a mortgage, etc. That really sucks....now imagine: you lose your job!!!

    Personally, I think prequalified loans should be forbidden. But that is just my opinion. I could be full of crap.
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  2. #12
    Senior Member ptgatsby's Avatar
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    Quote Originally Posted by Little Linguist View Post
    I remember back in the day where I had to get student loans, there was a question on whether or not I wanted a floating interest rate. Of course, I said "Hell, no!!!" and chose the 5.25% fixed interest rate.
    FWIW, fixed rates cost more than variable rates the majority of the time (this is true regardless of the rate - their is an inherent risk premium charged for locking in a rate)

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