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/biz/ - Business & Finance

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669631 No.669631 [Reply] [Original]

Is it a good idea to take out student loans and putting it into a high interest bank account? I have no clue how finance works so please enlighten me.

>> No.669635

>>669631
There is no way the interest rate on the loan will be lower than the interest you'll earn in a high-interest savings account. So no.

>> No.669636

Thought about doing this while finishing off a free 7 year md/phd degree. Problem is that its technically fraud.

>> No.669640

If it's a subsidized loan, you could face legal action if you're discovered using the money for non-approved purposes.

>> No.669643

>>669631

terms of the loan likely stipulate that you cannot do this.

it's not a horrible bet for someone that has a steady paycheck and a degree already. you would want to put the money in low cost ETFs, not a shitty bank account with 0.1% APR. but so much can go wrong during undergrad.

i got cancer twice and it took me 5.5 years to graduate, for example. if I had had loans that I needed to start paying back after 4 years, I woulda been fucked.

don't do it.

>> No.669645

Investing with loans is already pants on head retarded, but investing with student loans is fucking financial suicide

Getting a student loan means that all of the money has to get at least 8% return just to break even. Now factor in fees and the fact that if there is a market correction, which prevents you from bankrupting the debt, and the fact that this is fraud, and you've got a ton of risk with virtually no reward.

>> No.669653

>>669631

that's what i did, and it's working so far

don't have to pay it back until 6 months after you graduate....think about it, if you have no credit history then this is the easiest loan you could ever obtain with a half decent APR

>> No.669721

>>669653
Me to I got 6k in leading club making 14% with no interest or payments due for years... Fucking legit

>> No.669724

>>669721
>systemic event causes most of your LC loans to default
Woops.

>> No.669884

Even if you could do this...you'd still lose money to inflation.

>> No.670103

>>669631

It's fraud, but lendingclub.com would be the way to go.

>> No.670193

>>669631
this is called arbitrage, some hedge funds used to get big loans of money from the banks and they would buy bonds.

>> No.670227

>>669631
Might as well practice sucking dick and taking it in the ass while you are it because you will need it once you are in jail you faggot bitch.

>> No.670242

>>670193
>this is called arbitrage, some hedge funds used to get big loans of money from the banks and they would buy bonds.

Umm no, what you described is not called arbitrage, it's called leverage.

>> No.670258

>>669631
Depends on where you live.

In the UK we get loans for 1%, and you only have to pay them back if you earn over a certain amount. Even then, the minimum payments aren't anything ridiculous, and there's very little pressure from the loaning groups.

If there's nothing in the clause, invest it. If there is, live off of it and invest your own money.

>> No.670280

>>670193
Arbitrage is playing off the difference between prices of a commodity. Corn is 10 dollars on exchange x per bushel and 9 dollara on exchange y. I buy it on exchange y and sell it on exchange x and make a dollar per bushel. That is arbitrage.

>> No.670296

>>670258

Yes, this. I still have my student loan, you'd be mad not to take it at a paltry percent or so of interest. Plus, you can use it however you want. I mean, it's not like there's any distinctions about where the money comes from once it's in your account. The same would probably be true for OP - so long as he actually went to university how on earth would a lender prove that it was specifically their money that he had invested?

>> No.670299

Take out a max loan and stick it in bitcoin

>> No.670313

>>669631
https://www.google.co.uk/search?q=stoozing

>> No.670658

Student loan interest from the state is 0.15% here. Payback is very reasonable. Just putting it in a 1% savings account would be a reasonable choise i guess.

>> No.670674

>>670299
Wahahaha

>Its sad because you know theres people that have actually done this

>> No.670680

>>670674
I was considering leveraging my house in last april. Would have made ~20% but I didn't do it because I would rather not risk my place of residence you know?

>> No.671159
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671159

>>669645
Law fag here

That's a misconception, YOU CAN include a student loan in a chapter 7 bankruptcy filling, but it Severely restricted and the loan would have to prove to be beyond an "undue burden".

That means you pretty much have to have lost an arm or a leg, homeless, have cancer, and have no family members or friends.