GMAC Bank loans are useful way to buttress the difference remaining after all possible federal loans are taken into consideration. Private loans are best used as a last resource, because they are not safe-guarded for students like federal loans. Once all other avenues of non-private aid have been exhausted, you may want to research GMAC. On the GMAC website, students are able to apply online with the immediate response from the company.
Make sure to check the pros and cons of each lender. See which ones offer interest rate reductions or check which allow grace periods, a specified amount of time after leaving school before you have to start repayment on the loans.
Most private loans have the same sorts of downsides: the APR is usually higher, you often need a co-signer with well-established credit, and interest usually begins to rack up while you are still in college. It is because of these negative aspects that you want to be sure to research as many private lenders as possible before committing to one.
One major downside of the GMAC Bank Loans is that with each student loans comes something known as an origination fee. This fee is usually a percentage of the total amount that you are borrowing for each loan, ranging from 3.0% to 10.5%. For instance, if you are borrowing $10,000, there may be an origination fee of 4.5%, there will be an extra charge of $471. Thus, you will only be getting $10,000 to put towards your tuition, but you will owe $10,471, to start with, before interest begins to kick in.
With the GMAC Bank Loan, you can borrow as little as $1,500. GMAC Undergraduate Loan has a minimum loan amount of $1,500, with a maximum of $40,000 per year. GMAC loans also have an aggregate of $130,000, meaning the total amount borrowed for a single individual’s loans which cannot be exceeded. But, hopefully, you will only be using this private loan to make up the gap between the federal loans, scholarships, and grants you have received, and the final balance on tuition.
The private lenders insist on a creditworthy consigner when the student borrower is without a credit history, so that the bank will know that you are a good investment. However, having a cosigner is a good thing for you, the borrower, considering that the cosigner’s good credit can help you get a reduced interest rate. A high interest rate can end up doubling the initial amount borrowed after 10 to 30 years of monthly interest charges. The lower the interest rate, the better.
The GMAC student loan also offers 0.25% interest rate reductions for those who choose automatic repayment options when they get out of school. They also offer a further 0.25% reduction to those who pay their first 36 payments on time.
However, unlike federal loans, private loans start charging interest on loans while you are still enrolled in school. Luckily, you are able to deduct up to $2,500 a year interest from student loans on your taxes.
The GMAC private loans allow a six months grace period. You do not have to start repaying on your GMAC Bank loan while you are enrolled in an accredited college.