So student loans

Sami

I'm going to be getting a student loan from a private lender, then sticking that money in a mutual fund so that it can appreciate and I can pay for grad school in 5 years with as little debt as possible. I also need a laptop and to pay off my credit card because fuck minimum payments. I'll be needing $8k - $10K

My question is this: which private lenders have y'all used and/or you would recommend?

zilo

This is a pretty terrible idea. The odds of getting a private loan with a fixed interest rate lower than what you'll get out of a mutual fund are effectively zero. You're virtually guaranteed to lose money doing this. Plus, depending on the terms of the private student loan, it probably constitutes fraud.

Mai-Kero

That's not how mutual funds work. To pay for Grad school you'd need your 8-10k loan to grow by about ten times. A mutual fund will maybe get you like 5% growth, which is notable less. Plus, you'll lose money, because the growth percentage on the mutual, fund will be waaaay less than your interest rate on the loan. So you'll owe tons of money in interest for money that you won't even be using.

Lail

And you'd have to pay tax on any money earned through the mutual fund, no? Making your rate of return even smaller.

However, I would think taking out a loan to pay off your credit card may be helpful. You're probably paying A LOT more in interest on that.

RUNN1NGMAN

You know that saying about how money doesn't grow on trees? Yeah...

If any slob could take out a private loan and stick in in a mutual fund and actually make money from it, the whole world would turn inside out.

ANTVGM64

I got approved for a 34k student loan from Chase.

In like, two weeks. With No co-signer and no credit.

Thanatos

Okay, several problems with this plan:

1) 5 years is not enough time to expect to make money at all on a mutual fund, let alone expect to make enough to cover your interest and the taxes, especially in today's market. Mutual funds are long-term investments.

2) If you take out a private student loan and use it to pay for school, the interest is tax-deductible. If you take out a private student loan and use it to pay for non-school-related things (whatever is on your credit card, investing in your mutual fund), it is not tax-deductible.

3) Getting approved for a student loan doesn't mean you have to withdraw all of it now.

What you should do is get the student loan, and use that to pay for as many school expenses as possible. Use money you otherwise would have spent on paying for school (this includes dorm room, food, books, tuition, travel to and from classes) to pay down your credit card.