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The 8% interest on the loans seems high to me. Around here (Poland), a standard credit card is at 10% interest, and student loans should be much safer for the b

by badpun 7y ago

The 8% interest on the loans seems high to me. Around here (Poland), a standard credit card is at 10% interest, and student loans should be much safer for the bank.

tehlike 7y ago
In the us, credit card interest is around 25% or more.
- deleted 7y ago
  [deleted]
joehandzik 7y ago
It's true. I may have actually been higher for some loans until I got a couple of promotions and had enough of an income increase to be able to refinance to a 5 year 4.75% loan at SoFi. Which itself still feels high as you watch DAILY interest compounding happen. I lean fairly liberal, but I think we can make significant strides with this issue in the US by simply changing what max interest rates are and how this interest compounds. The way things work right now truly feels like robbery when you're in the thick of it.
- burfog 7y ago
  We could limit max interest rates. If that had been in place, your loan would have been denied. Would that have been better for you? Might you have then chosen to get an illegal loan at an even higher interest rate from organized crime, with a risk of violence for non-payment?
tdfx 7y ago
Just checked my direct federal loans (the first source of loan funding for most US college students -- the second is private banks). Interest rate is 4.41%. I was lucky because federal direct loans covered my tuition, but many other students need to take private loans, as well.
- godelski 7y ago
  Did you have a cosigner? I have a interest rate around that but my dad cosigned. Him doing that really reduced my interest rate.
eckmLJE 7y ago
Average credit card APR in the US is a bit different. https://www.creditcards.com/credit-card-news/rate-report.php https://www.creditcards.com/credit-card-news/rate-report.php
clmul 7y ago
In the Netherlands, interest rates on student loans are currently 0% (they're tied to the 5 year bond interest rates), and there was a huge outcry when they planned to tie it to the 10 year interest rates instead...
woodruffw 7y ago
In the US, 8% is about right for a graduate/professional loan by the federal government[1]. I'm not sure about private/bank loans. 10% interest on a credit card would be pretty low for the US, AFAICT. Most first-time cards come with 23-24% interest, at least when I started searching for one. [1]: https://studentaid.ed.gov/sa/about/announcements/interest-rate https://studentaid.ed.gov/sa/about/announcements/interest-ra...
kalleboo 7y ago
For comparison, in Sweden the government student loan interest rate is currently 0.16%. Compare to the central bank rate of -0.25% (yes, negative). So an equivalent U.S. interest rate (using the fed rate and the same spread) would be around 3%.
pjc50 7y ago
It's extortionate, given that they're not dischargable in bankruptcy. There's no good reason for the student loan rate to be more than 1% above the mortgage rate.

by badpun 7y ago

The 8% interest on the loans seems high to me. Around here (Poland), a standard credit card is at 10% interest, and student loans should be much safer for the bank.

tehlike 7y ago

In the us, credit card interest is around 25% or more.

deleted 7y ago
[deleted]

joehandzik 7y ago

It's true. I may have actually been higher for some loans until I got a couple of promotions and had enough of an income increase to be able to refinance to a 5 year 4.75% loan at SoFi. Which itself still feels high as you watch DAILY interest compounding happen. I lean fairly liberal, but I think we can make significant strides with this issue in the US by simply changing what max interest rates are and how this interest compounds. The way things work right now truly feels like robbery when you're in the thick of it.

burfog 7y ago
We could limit max interest rates. If that had been in place, your loan would have been denied. Would that have been better for you? Might you have then chosen to get an illegal loan at an even higher interest rate from organized crime, with a risk of violence for non-payment?

tdfx 7y ago

Just checked my direct federal loans (the first source of loan funding for most US college students -- the second is private banks). Interest rate is 4.41%. I was lucky because federal direct loans covered my tuition, but many other students need to take private loans, as well.

godelski 7y ago
Did you have a cosigner? I have a interest rate around that but my dad cosigned. Him doing that really reduced my interest rate.

eckmLJE 7y ago

Average credit card APR in the US is a bit different. https://www.creditcards.com/credit-card-news/rate-report.php https://www.creditcards.com/credit-card-news/rate-report.php

clmul 7y ago

In the Netherlands, interest rates on student loans are currently 0% (they're tied to the 5 year bond interest rates), and there was a huge outcry when they planned to tie it to the 10 year interest rates instead...

woodruffw 7y ago

In the US, 8% is about right for a graduate/professional loan by the federal government[1]. I'm not sure about private/bank loans. 10% interest on a credit card would be pretty low for the US, AFAICT. Most first-time cards come with 23-24% interest, at least when I started searching for one. [1]: https://studentaid.ed.gov/sa/about/announcements/interest-rate https://studentaid.ed.gov/sa/about/announcements/interest-ra...

kalleboo 7y ago

For comparison, in Sweden the government student loan interest rate is currently 0.16%. Compare to the central bank rate of -0.25% (yes, negative). So an equivalent U.S. interest rate (using the fed rate and the same spread) would be around 3%.

pjc50 7y ago

It's extortionate, given that they're not dischargable in bankruptcy. There's no good reason for the student loan rate to be more than 1% above the mortgage rate.