posted
I'm hoping I may soon have an opportunity to enroll in an incredible new online animation course, the first of its kind, founded by my animation heroes at Pixar and ILM... they haven't announced the prices yet, but it's certainly going to be a lot less than $40k for AAU in SF, not to mention a heck of a lot more convenient.
Assuming it's between $4k-$8k for a year, plus $4k to get myself a nice computer at home, I'm trying to figure out how I'm going to pay for this. I don't know if I could get a student loan for the program, and the computer will certainly be a personal purchase.
So I'm thinking about getting a credit card, for the computer at least, because it seems a lot easier and less complicated than trying to find some other personal loan. And looking at my credit union's loan rates, it doesn't seem like I'd be paying much more a month....
So say I want to put a $4k computer on a credit card, and ideally I'd like to be paying about $80/month on it. I've never had a credit card before, and the credit estimator I used figured my credit rating would be about a C+/B-. Would I qualify for any cards that would let me pay about $80/mo on a $4k balance? How do I figure out what my monthly payments would be, anyhow? And can you usually set up an automatic withdrawal from a checking account with most credit companies?
Thanks! This credit stuff is so complicated and scary... and all the "experts" are trying to sell me something. Posts: 1681 | Registered: Jun 2004
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posted
Instead of going the credit card route, with interest rates the way they are, I'd strongly recommend that you seek financing through a credit union or the vendor itself.
Posts: 37449 | Registered: May 1999
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posted
You really really really really really don't want to put a $4000 purchase on a credit card and pay $80/month on it. Really. Either go with the credit union or, as Tom said, check out financing options from whereever you buy the computer. Or, if you are primarily going to use it for school, and the program ends up qualifying for student loans, you can probably use student loan money to buy it. If you have to have debt, student loan debt is one of the best to have.
Posts: 7954 | Registered: Mar 2004
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posted
If you qualify for any other type of financing, try that first. You could probably get a credit card that would let you charge $4000 and pay $80/month. But about ¾ of your monthly payment would be going to interest and only $20 or so to reducing the principle. (That ratio would, of course, get better as you paid down the principle, but at $20 a month that would take a while.)
Posts: 9866 | Registered: Apr 2002
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posted
Sounds right. there are the subsidized student loans, which tend to be fore the substantiated costs of education, and there are unsubsidized student loans. I've known at least three people who used unsubsidized student loans to buy a car (which is foolish and shocking). Just to illustrate that they don't care what you do with the money, though I think it would be much wiser in your case to use for a tool that actually involves your education.
Posts: 11017 | Registered: Apr 2003
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posted
*Seconds both opinions* [EDIT: so there where only two other posts when I wrote this, so sue me. ]
Credit cards should not be used to finance big purchases, they're much, much more expensive in the long run. Find a loan, then sit down and figure out how you will pay each month to make sure you don't get behind (the charges really stack up if you fall behind). Then plan in leeway so when something that you didn't see happening, like root canal, happens you don't have to fall forever behind on your payments.
posted
Ah-ha, this is just what I needed to hear. So I'm cruising around looking at private student loans like Sallie Mae, and they all talk about "approved institutions". Which this certainly wouldn't be.
I guess I'll go to my credit union today. I'm hesitant because the last time I went in to ask about loans and credit, they just looked at me like an idiot and sort of brushed me aside. It's sort of a catch-22... you have to be credit savvy to learn more about credit.
(normally my bank/credit union is very kind to me, so maybe I just got a bad apple that day...)
Posts: 1681 | Registered: Jun 2004
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This is my bank's loan page.... do any of these look like what I want? And why are the rates for the loans higher than the rates for the Visa at the bottom?
posted
The Signature/All Purpose looks like the only one that would do, and it's not much better than a credit card (maybe not any better, if you qualify for a long-term low rate card).
You might want to look into manufacturing financing for the computer. I know Dell has it, as do some others. This leaves the credit card available for tuition.
Also, the program should have information on applicable loan programs. Are you sure they're not going to affiliate with a university to get the accreditation for student loans? Most of these programs do, and these are big names who I'd think would do it right. I know, for example, that there is financing for Microsoft certifications, simply to encourage more people to get them. This might be similar.
posted
I know Apple has student loans for their computers. You could probably get one if you're enrolled in this class. They should be mentioned on their Education Store.
Posts: 1261 | Registered: Apr 2004
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posted
If you can't find a good loan rate, and feel the need to use the credit card, due me a favor and pretend to yourself it's a __ year loan. Don't pay the minium due, because then you literally will be paying forever. Figure out what you should pay each month, to get that loan gone in however long you feel is appropriate and then pay that amount each month. This is one of the ways credit cards make money, you have to pay a specific percent of your debt back each month, but as you pay it back the debt drops and so does the amount you have to pay, and this will drag on for years past when a normal loan would be payed off. Pay off your credit-card like a loan and save yourself some very serious money.
posted
Ok, your balance, when it is all said and done sounds like it is going to be around $12,000.
First of all I wouldn't necessarily only shop at your own credit union. Consumer loans are a product like anything else and a little bit of research can often get you cheaper rates.
Secondly, there is only the fixed rate of 12.9% on the credit card for if your balance is under $5,000. Otherwise, you will be paying Prime plus 3.9% but not less than 8.9%
So in a wierd quirk of fate you will actually be paying less interest if you have over $5k on the card.
This could work to your advantage if prime rates are low like now (at 4.25%) but if they start going up it could be to your disadvantage. Here's a historic chart of Prime Rates The question is how quickly do you want to pay this off?
If you only put $80/month on a 5K debt with you will be paying it back for probably 6+ years (maybe 7 or 8 counting interest). If you did all 12K you would be paying for 13-15+ years at $80/month.
Another note, through the "classic Visa" program, you have to pay a minimum payment of 3% of the balance per month for a balance less than 5K. (.03)4000= $120 This means the $80/month payment isn't possible. If your interest rate is higher than the minimum payment (it depends on exactly how they are calculating the APR) then your balance is going to gradually increase and those monthly payments are going to as well. If you are over 5K your payments actually drop, (0.02)5000= 100 as well as your current interest rate. I'd say for the next two years you'd be better off with their platinum variable interest rate credit card, but if the prime rates start increasing drastically and get over 7%, you'd need to consolidate it into a fixed rate loan pretty quick.
(And realize that with anything you do with this credit union your minimum payment is going to be $100+/ month and you will probably have to pay even more than that in order to get the balance down at all.)
posted
And the intrest rate is going to go up. The Fed has been lowering rates ever since we went into th recession, but finally, now that we're starting to go up, they can't leave them this low. This is the time to get a low rate because the Fed is begining to start the long process of upping the intrest rates, probably a quarter point every time they meet, and by the time you've got this loan paid off it'll have been up at a normal rate for years. So watch out for that.
posted
Speaking of my sister's recent experience: she started in a program at our local community college. She got student loans and Pell Grants. That money goes directly to the college to her account. Her tuition was paid, she could purchase books and supplies at the college bookstore and the money was subtracted from her account. (I don't recommend buying supplies from the college bookstore but that's another story - higher prices.)
After a certain time had passed - about 3 weeks, I think - she got a check for the balance. It was intended to be used for things to help her in her education, which meant she could buy a computer or even a car to help her get to classes. So, as long as the money was used in a way to further her education, that was okay.
If you do get a credit card and you have money coming from student loans after tuition is paid, I would suggest paying off the credit card immediately. That would help your credit rating while allowing you to get the computer quickly. Believe me, you don't want to get sucked into debt - it's no fun.
Credit is kind of a Catch-22. If you don't have any debt, they don't want to give you credit because they don't know if you will pay it back. And, of course, if you have to much debt, they don't want to talk to you. So make your choices wisely.
Looking at your first post again, I just thought of something. Is this program accredited? Will it be eligible for you to get student loans and Pell Grant? That's a big consideration. If it's not accredited and you decide to further your education, the next place you go might require you to start over.
Posts: 2034 | Registered: Apr 2004
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posted
Great, great advice! I realized at lunch that I may have a family member with a good credit history, so maybe he could help me get one of these fancy lower-interest loans from Sallie Mae or something. That would do the trick.
Anyone know how long it usually takes to actually get the money from something like this? Weeks? Months? Do they just write you a check?
Posts: 1681 | Registered: Jun 2004
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Federal loans have set disbursment dates--they're always 10 days before your classes are set to begin. This includes Stafford loans (subsidized and unsubsidized), Signature loans, Pell grants, and...that might be it.
Bank loans--I have no idea.
But if you do have someone willing as a cosigner for a non-student loan, use 'em, as the interest rate will be much lower.
Posts: 14745 | Registered: Dec 1999
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