Receiving annuity money at 30; can I defer loans at all?

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M.M.
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Receiving annuity money at 30; can I defer loans at all?

Postby M.M. » Sun Oct 03, 2010 7:46 pm

If I were to receive roughly 200K at age 30 would it be possible at all from any loan granting institution to defer law school debt until then, and pay it in full then?

It seems reasonable that I could offer to pay a higher amount total in interest in order to defer, right?


Edit: perhaps I should include that I'm 20 and [naive and] under the assumption that I'll be graduating law school by 24-26. Shooting for T6, T14 at the lowest, if that helps.

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Hattori Hanzo
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Re: Receiving annuity money at 30; can I defer loans at all?

Postby Hattori Hanzo » Sun Oct 03, 2010 8:34 pm

If the money is the type of interest that you can sign over to the loan company it can be possible but it should be a sure-as-hell kind of annuity.
Also, you're a lucky bastard to receive $200K/year from 30 on. If I were you I would just go have fun instead of spending my 20s at law school.

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vanwinkle
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Re: Receiving annuity money at 30; can I defer loans at all?

Postby vanwinkle » Sun Oct 03, 2010 8:36 pm

M.M. wrote:If I were to receive roughly 200K at age 30 would it be possible at all from any loan granting institution to defer law school debt until then, and pay it in full then?

It seems reasonable that I could offer to pay a higher amount total in interest in order to defer, right?


Edit: perhaps I should include that I'm 20 and [naive and] under the assumption that I'll be graduating law school by 24-26. Shooting for T6, T14 at the lowest, if that helps.

You'll probably have to do the standard sort of loans like everyone else does, and just make minimum payments until you hit 30.

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Hattori Hanzo
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Re: Receiving annuity money at 30; can I defer loans at all?

Postby Hattori Hanzo » Sun Oct 03, 2010 9:00 pm

vanwinkle wrote:
M.M. wrote:If I were to receive roughly 200K at age 30 would it be possible at all from any loan granting institution to defer law school debt until then, and pay it in full then?

It seems reasonable that I could offer to pay a higher amount total in interest in order to defer, right?


Edit: perhaps I should include that I'm 20 and [naive and] under the assumption that I'll be graduating law school by 24-26. Shooting for T6, T14 at the lowest, if that helps.

You'll probably have to do the standard sort of loans like everyone else does, and just make minimum payments until you hit 30.


I don't see how this is any different from the normal lump-sum-for-annuity deal. If his annuity is solid he should be able to swap it with the equal present value + premium in cash. Even if the loan service co. doesn't do that, he can do it at any shop that buys structured settlements/annuities.

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vanwinkle
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Re: Receiving annuity money at 30; can I defer loans at all?

Postby vanwinkle » Sun Oct 03, 2010 9:03 pm

Hattori Hanzo wrote:I don't see how this is any different from the normal lump-sum-for-annuity deal. If his annuity is solid he should be able to swap it with the equal present value + premium in cash. Even if the loan service co. doesn't do that, he can do it at any shop that buys structured settlements/annuities.

Yeah, but buying an annuity means that they'd be offering him a large sum in exchange for giving up rights to the annuity forever. It sounds like he just wants to get loans for long enough to last until his first annuity payment and keep the annuity, in which case he's better off going with more standard loan options.

I'm sure there's someone out there who will do some kind of annuity-backed loan assuming it's a guaranteed asset. If it's the kind of thing that's set up so that if he dies before he's 30 it goes to someone else, nobody will grant a loan backed by that, because if he dies they get nothing back.

M.M.
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Re: Receiving annuity money at 30; can I defer loans at all?

Postby M.M. » Sun Oct 03, 2010 9:45 pm

Maybe there's some confusion, I'm not getting 200K/year after 30 I'm just getting one payment of (actually it is) 190K.

I will definitely be receiving the money, but I'm not sure who it go to if I die.

So ... I hope that clears things up?

Oh and the money isn't worth the pain I've gone through and will forever go through. It ruined my very good chances at being a professional fighter, I was ALMOST there, had 2 amateur fights left and was getting offers to go pro. I have had pain for years and I'm only 20, I couldn't walk for 2 years of my life, and I will forever have pain. Not lucky. Lucky in some respects, though. I am very thankful for the money and it is part of the reason graduate / law school is even an option for me.

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Sauer Grapes
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Re: Receiving annuity money at 30; can I defer loans at all?

Postby Sauer Grapes » Sun Oct 03, 2010 10:02 pm

You are probably going to just have to pay the minimum payment until you get your money, then you can pay the remainder in full if you wish.

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Hattori Hanzo
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Re: Receiving annuity money at 30; can I defer loans at all?

Postby Hattori Hanzo » Sun Oct 03, 2010 10:05 pm

Yeah that is not lucky! So it's not an annuity. You could still get PV cash for the money but at a pretty high premium and risk factor. Unless you absolutely and desperately need the money you should just wait until you get the cash at 30. With IBR the payments shouldn't be much of a PITA and $200K should still cover the initial loan amount + whatever additional interest is accumulated if IBR payments are too low during the 4 years you'll have to wait.

M.M.
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Re: Receiving annuity money at 30; can I defer loans at all?

Postby M.M. » Sun Oct 03, 2010 11:29 pm

Hattori Hanzo wrote:Yeah that is not lucky! So it's not an annuity. You could still get PV cash for the money but at a pretty high premium and risk factor. Unless you absolutely and desperately need the money you should just wait until you get the cash at 30. With IBR the payments shouldn't be much of a PITA and $200K should still cover the initial loan amount + whatever additional interest is accumulated if IBR payments are too low during the 4 years you'll have to wait.

I appreciate the help, but I got lost in all the acronyms :(

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Hattori Hanzo
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Re: Receiving annuity money at 30; can I defer loans at all?

Postby Hattori Hanzo » Sun Oct 03, 2010 11:43 pm

PV = Present Value, i.e. how much you can get today for $200K 5 years in the future.

IBR = Income Based Repayment. Unless the law changes, your loans will be covered by IBR, which caps the annual payments after graduation at roughly 10% of your gross annual income. So if you took out $200K in loans but only make $60K/year, your monthly payment will be no more than $500 (60,000 x 0.1 / 12). If you search the forum you'll get more details on this but that's the general idea.

PITA= Pain In The A$$

Edit: more info on IBR: http://www.ibrinfo.org/

M.M.
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Re: Receiving annuity money at 30; can I defer loans at all?

Postby M.M. » Mon Oct 04, 2010 12:15 am

Ok, so the consensus is that I probably won't be able to just not pay anything at all? I know it's possibly overly optimistic thinking but it'd be amazing :p

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IAFG
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Re: Receiving annuity money at 30; can I defer loans at all?

Postby IAFG » Mon Oct 04, 2010 12:38 am

M.M. wrote:Ok, so the consensus is that I probably won't be able to just not pay anything at all? I know it's possibly overly optimistic thinking but it'd be amazing :p

get a real job, work til you're 27, go to LS, pay off the whole thing when you're done. problem solved.

bigben
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Re: Receiving annuity money at 30; can I defer loans at all?

Postby bigben » Mon Oct 04, 2010 12:53 am

Hattori Hanzo wrote:Yeah that is not lucky! So it's not an annuity. You could still get PV cash for the money but at a pretty high premium and risk factor. Unless you absolutely and desperately need the money you should just wait until you get the cash at 30. With IBR the payments shouldn't be much of a PITA and $200K should still cover the initial loan amount + whatever additional interest is accumulated if IBR payments are too low during the 4 years you'll have to wait.

Technically if he could get the PV at a better rate than his law school loans, then it would be a good idea. Also factor in the significant origination fees on the loans. Right now most of the loans would be 8.5% but that could be different in a few years.

I have no idea what kind of rate he could get. Theoretically it would depend on market rates and risk of course, and assuming there is little risk here I'd say he could probably beat 8.5% + fees. In reality I don't know where you would go to do this. Presumably, those late night "get your cash now!" companies offer terrible terms.

M.M.
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Re: Receiving annuity money at 30; can I defer loans at all?

Postby M.M. » Mon Oct 04, 2010 1:16 am

IAFG wrote:
M.M. wrote:Ok, so the consensus is that I probably won't be able to just not pay anything at all? I know it's possibly overly optimistic thinking but it'd be amazing :p

get a real job, work til you're 27, go to LS, pay off the whole thing when you're done. problem solved.


A Psych degree doesn't tend to yield much of what I'd call a "real job" :/

Besides, why would I do that if there's a possibility I can just pay it off then ... ? I could get LS done by about 25 and be wealthy while I'm still young and can enjoy it to the fullest. Not only that but not having to pay loans = more potential to expand my money since the more money you have, the more you can make.

bigben
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Re: Receiving annuity money at 30; can I defer loans at all?

Postby bigben » Mon Oct 04, 2010 1:34 am

M.M. wrote:Ok, so the consensus is that I probably won't be able to just not pay anything at all? I know it's possibly overly optimistic thinking but it'd be amazing :p

You wouldn't want to do this even if you could. The interest rate on your loans will be high, best to pay them down as much as you can as soon as you can.

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IAFG
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Re: Receiving annuity money at 30; can I defer loans at all?

Postby IAFG » Mon Oct 04, 2010 1:35 am

M.M. wrote:Not only that but not having to pay loans = more potential to expand my money since the more money you have, the more you can make.

even if you could defer, interest would accrue. your reasoning is faulty.

M.M.
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Re: Receiving annuity money at 30; can I defer loans at all?

Postby M.M. » Mon Oct 04, 2010 3:15 am

bigben wrote:
M.M. wrote:Ok, so the consensus is that I probably won't be able to just not pay anything at all? I know it's possibly overly optimistic thinking but it'd be amazing :p

You wouldn't want to do this even if you could. The interest rate on your loans will be high, best to pay them down as much as you can as soon as you can.


Ehhh I agree to an extent but as I said more money younger = good

@ IAFG: that doesn't mean you can't make money off your income, and interest has nothing to do that. If I can get a return of 8% on the money I save by not paying interest that will accrue at 7% I will have made money.

bigben
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Re: Receiving annuity money at 30; can I defer loans at all?

Postby bigben » Mon Oct 04, 2010 3:35 am

M.M. wrote:If I can get a return of 8%

Protip: You can't.

M.M.
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Re: Receiving annuity money at 30; can I defer loans at all?

Postby M.M. » Mon Oct 04, 2010 11:14 am

bigben wrote:
M.M. wrote:If I can get a return of 8%

Protip: You can't.


I know. Thanks for taking my example so literally

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IAFG
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Re: Receiving annuity money at 30; can I defer loans at all?

Postby IAFG » Mon Oct 04, 2010 3:24 pm

M.M. wrote:
bigben wrote:
M.M. wrote:If I can get a return of 8%

Protip: You can't.

I know. Thanks for taking my example so literally

your example is stupid though since that is what you would literally have to do for this to make any sense

M.M.
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Re: Receiving annuity money at 30; can I defer loans at all?

Postby M.M. » Mon Oct 04, 2010 4:40 pm

IAFG wrote:
M.M. wrote:
bigben wrote:
M.M. wrote:If I can get a return of 8%

Protip: You can't.

I know. Thanks for taking my example so literally

your example is stupid though since that is what you would literally have to do for this to make any sense


Ok, disregard the second part of my post then. Happy?




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