Federal Student Loan Loophole?
Alright, I am working at the moment and going to school full time. I’m in my 3rd year of a 4 year program. I am looking to buy a new car. I’ve checked into private loans and have considered them.
But I’ve recently had the idea, of using a federal loan to do this. See, I have all my balances covered at school so I have nothing left to pay for. So heres my question, if i was to take out roughly $3500 for a down payment on a car, could i do that through a federal loan? Since I have no balances on my account, wouldn’t the school just send the check to me after they seen that? If this is possible then how long would this process take? I feel like I am missing something because this seems a little too easy.
I would obviously much rather take out a federal loan than taking out a private loan because for one, i’ll have all of my loans in one place and two, the interest rates are MUCH better.
Thanks for any help that you can offer……..
It is not advisable to use a federal loan to buy a car. You say the interest is “really good”, but I doubt it would cost you less in the long run.Remember, you’d still be paying on that loan until 2019. Student loans are automatically put on a ten year payment plan.
