Student loan payments: Actual numbers

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Kage3212
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Re: Student loan payments: Actual numbers

Postby Kage3212 » Sun Oct 11, 2015 1:09 am

In terms of refinancing, the prudent advice is to make sure your credit score is in tip-top shape before starting that process correct? I am looking to go down the refi road, but my credit score has taken a hit due to substantial credit card usage during bar prep/post-bar vaca. If I apply for the refi with approx. a 760 credit score, will Sofi (or any other company) care that I have a little blip on the credit score radar (approx 625) for these past few months? Thanks for the help.

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El Pollito
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Re: Student loan payments: Actual numbers

Postby El Pollito » Sun Oct 11, 2015 1:13 am

Kage3212 wrote:In terms of refinancing, the prudent advice is to make sure your credit score is in tip-top shape before starting that process correct? I am looking to go down the refi road, but my credit score has taken a hit due to substantial credit card usage during bar prep/post-bar vaca. If I apply for the refi with approx. a 760 credit score, will Sofi (or any other company) care that I have a little blip on the credit score radar (approx 625) for these past few months? Thanks for the help.

you prob wont get approved, they are really strict re credit rating

Kage3212
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Re: Student loan payments: Actual numbers

Postby Kage3212 » Sun Oct 11, 2015 1:22 am

El Pollito wrote:
Kage3212 wrote:In terms of refinancing, the prudent advice is to make sure your credit score is in tip-top shape before starting that process correct? I am looking to go down the refi road, but my credit score has taken a hit due to substantial credit card usage during bar prep/post-bar vaca. If I apply for the refi with approx. a 760 credit score, will Sofi (or any other company) care that I have a little blip on the credit score radar (approx 625) for these past few months? Thanks for the help.

you prob wont get approved, they are really strict re credit rating


Really? So a three month blip will preclude me from refi opportunities, despite an "excellent" rating at time of application and a $160k salary? If that is the case, how long do you anticipate that the 3-month blip will prevent me from refi-ing? Clearly didn't have the foresight to realize these ramifications a few months ago.

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hous
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Re: Student loan payments: Actual numbers

Postby hous » Sun Oct 11, 2015 9:41 am

'm a recent law school graduate and came out with $50,000 in student loans. Upon graduation and gaining employment I quickly began making payments on my student loans. I was disturbed that despite making $500 payments my principal balance barely changed because of the disgusting 6.8% interest rate. I did some legwork and came across some of the student loan refinance websites. I applied to two, DRB and SoFi. My credit score was 760 at the time and I was making 65k.

I applied to SoFi because they are the big dog in student loan refinancing and was the first to come up from a google search. SoFi's application was oddly simple and didn't require much time or information gathering. If I recall I just submitted two of my most recent pay stubs, loan payoff, Passport, and transcripts. They ran a soft credit search on me and I was initially dinged just two days after creating my account. I received an email from SoFi explaining I was dinged because they couldn't confirm my address and that I had insufficient work experience. I sent them an email asking why they weren't able to confirm my identity since they had my passport and that I thought my 7 years work experience, albeit part-time, would be sufficient. A week later I received a call from a SoFi rep who agreed that my identity shouldn't have been an issue but apparently I made a mistake and said I had 0 years of work experience on the application, doh! She reapplied me for the refinancing and I got approved a week later! I wasn't too thrilled with the 5% fixed offer they sent me so I inquired what my adjustable rate would be and was told 4.05; all SoFi loans are eligible for an additional .25% autodebit decrease. I ended up accepting the adjustable refinance offer and instantly set up the autodebit feature so my rate has been 3.805% for the past couple months which is awesome.

The first thing I noticed is that my monthly payment has decreased. I have also noticed a much larger portion of my payments go to principal which is a great feeling.

I also applied with DRB but their application process was much more detailed and they no matter how many times I applied they dinged me for having an incomplete application. I recommend applying to both SoFi and DRB though and shop around for the better rate. DRB was advertising better rates at the time I applied so I was a little bummed they didn't approve me.

If anyone is interested in checking their SoFi refinance rate, you can use my referral code and we will each get $100 if you accept refinancing through them. Definitely shop around the different lenders though because one of them may give you a better rate. Also, this is really important, if you refinance government back student loans (i.e. Sallie Mae) you will lose government benefits such as Public Service Loan Forgiveness eligibility, IBR and PAYE eligibility, and certain loan deferment rights. However, if you are like me and you think you will end up paying off your student loans within 10 years, are working in the private sector, and are not on an income-base repayment plan then student loan refinancing may be a good idea. Explore your options, but if you decide to apply with SoFi you can use my referral code:

https://www.sofi.com/refer/234/11233

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Old Gregg
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Re: Student loan payments: Actual numbers

Postby Old Gregg » Sun Oct 11, 2015 11:41 am

Kage3212 wrote:
El Pollito wrote:
Kage3212 wrote:In terms of refinancing, the prudent advice is to make sure your credit score is in tip-top shape before starting that process correct? I am looking to go down the refi road, but my credit score has taken a hit due to substantial credit card usage during bar prep/post-bar vaca. If I apply for the refi with approx. a 760 credit score, will Sofi (or any other company) care that I have a little blip on the credit score radar (approx 625) for these past few months? Thanks for the help.

you prob wont get approved, they are really strict re credit rating


Really? So a three month blip will preclude me from refi opportunities, despite an "excellent" rating at time of application and a $160k salary? If that is the case, how long do you anticipate that the 3-month blip will prevent me from refi-ing? Clearly didn't have the foresight to realize these ramifications a few months ago.


your post makes zero sense. the only credit score that matters is the credit score at application (i.e., the one they pull in making their decision). they dont give a shit about any other score after you're approved. if your credit score is a 760 when you apply and your credit is pulled, you will get approved based on a 760. if it's a 640 when you apply, then you will likely be declined and it doesn't mean shit that your score was a 760 3 months before you applied.

Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Fri Oct 23, 2015 9:41 am

Kage3212 wrote:
El Pollito wrote:
Kage3212 wrote:In terms of refinancing, the prudent advice is to make sure your credit score is in tip-top shape before starting that process correct? I am looking to go down the refi road, but my credit score has taken a hit due to substantial credit card usage during bar prep/post-bar vaca. If I apply for the refi with approx. a 760 credit score, will Sofi (or any other company) care that I have a little blip on the credit score radar (approx 625) for these past few months? Thanks for the help.

you prob wont get approved, they are really strict re credit rating


Really? So a three month blip will preclude me from refi opportunities, despite an "excellent" rating at time of application and a $160k salary? If that is the case, how long do you anticipate that the 3-month blip will prevent me from refi-ing? Clearly didn't have the foresight to realize these ramifications a few months ago.

I don't think you understand how credit scores work.

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Danger Zone
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Re: Student loan payments: Actual numbers

Postby Danger Zone » Fri Oct 23, 2015 10:20 am

SOLID BUMP ANON

Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Fri Oct 23, 2015 10:31 am

Danger Zone wrote:SOLID BUMP ANON

Didn't mean to anon. My bad.

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AVBucks4239
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Re: Student loan payments: Actual numbers

Postby AVBucks4239 » Fri Oct 23, 2015 10:32 am

Well I guess the quote feature = auto-anon. Who knew?

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lymenheimer
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Re: Student loan payments: Actual numbers

Postby lymenheimer » Fri Oct 23, 2015 10:35 am

Anonymous User wrote:
Danger Zone wrote:SOLID BUMP ANON

Didn't mean to anon. My bad.


N1. Keep it goin!

Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Fri Oct 23, 2015 10:47 am

I'd wait the 3-6 months it takes to get your credit score back up to the 700s. Literally the only number that matters is your score the week or so that you apply. There are no "upward" or "downward" trajectories here. I actually think these guys just put all of your info into their proprietary calculator. The small amount of savings you forego now is likely going to be dwarfed by the savings you'll accrue over the next 5-10+ years with a marginally better interest rate (and my guess is that the difference between a 660 and 760 is going to result in more than a marginally better interest rate). Other factors considered are your work history (which will probably impact eligibility but not rate), other debt burden (ditto), and your salary (which will probably impact both).

I applied with DRB, SoFi, and Common Bond. DRB is the least slick out of the three, but gave me a significantly better rate. I've been repaying my loans with them for ~6 months and have no complaints. They're a smaller Connecticut bank, so the customer service feels weirdly small town charming (mostly for the better). I always found the SoFi reps pleasant to deal with, but they had more of a 1-800 Contacts "WE'RE A FRIENDLY STARTUP" feel.

Also, FWIW, all three of these companies have a credit score line above which additional increases won't impact anything. I don't remember what it is exactly, and it may have changed a bit from 6-months ago, but it's somewhere in the upper 700s--something like 770 or 780 (on the 850 scale). So if your credit score was 840 but has now dropped down to 790, I wouldn't let that hold you back from applying.

Finally, because salary does impact your rates (and I've learned that also directly from reps at all three companies), if you're expecting a raise in a month, it's almost definitely worth waiting. They only care about your actual payslip: bonuses aren't factored in, even if they're contractually guaranteed.

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emkay625
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Re: Student loan payments: Actual numbers

Postby emkay625 » Fri Oct 23, 2015 10:58 am

Posting for advice because this is overwhelming.

120K in loans (including interest). Clerking this year, making 58K. 160K next year. Married, husband makes 55K. We have about 48K in other debt as well (small undergrad student loans (his), car notes, cc debt, bar study loan).

Looking at the options on the loan web site and I have no idea what to choose. Help! Will we even qualify for any of the reduced payment options right now? (I know we won't next year).

Also, what is the best strategy here? Throw everything at loans? Balance between loans and savings?

Also what should I do with 45K (will be like 30K after taxes) clerkship bonus? Just loans? Pay off other debt?

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JohannDeMann
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Re: Student loan payments: Actual numbers

Postby JohannDeMann » Fri Oct 23, 2015 11:19 am

emkay625 wrote:Posting for advice because this is overwhelming.

120K in loans (including interest). Clerking this year, making 58K. 160K next year. Married, husband makes 55K. We have about 48K in other debt as well (small undergrad student loans (his), car notes, cc debt, bar study loan).

Looking at the options on the loan web site and I have no idea what to choose. Help! Will we even qualify for any of the reduced payment options right now? (I know we won't next year).

Also, what is the best strategy here? Throw everything at loans? Balance between loans and savings?

Also what should I do with 45K (will be like 30K after taxes) clerkship bonus? Just loans? Pay off other debt?


Depends on interest rates for the loans. At 168k in total debt, you are going to be paying all of it back. I would probably refi all the debt you can and lock in a 10 year fixed rate with DRB or SoFi and just pay according to schedule.

Another option, if your debt loads have vastly different interest rates, is to go on income based repayment right now using your latest tax return (2014) which should lock in a very low monthly payment. Then throw your extra money at the highest interest rate loan balance. Keep doing this until you've paid down the higher rate loans. You could also recertify and make PAYE or REPAYE or IBR payments (income driven repayments IDRs) your first yera in biglaw based on your 2015 tax return because IDRs lag behind a year of reality. This will give you time to pay down the higher interest loans and save a nest egg if you want.

Not sure where you are lviing, but if living somewhere other than NYC and SF/PA, you may want to consider riding out IDRs for a couple years to buy a house. That money could save you rental money in the future and make paying down loans easier. Your debt load is very manageable given your circumstances, so I'd kind of lean to locking up the 10 year low rate right now and just making small payments for 10 years without thinking about it. It may kind of suck this year, but every year after this will be a breeze.

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Re: Student loan payments: Actual numbers

Postby Anonymous User » Sat Oct 24, 2015 2:34 pm

To piggyback onto the last post, it's also worth considering First Republic Bank. I just refinanced with them 3.5% for 15 year fixed. Pretty incredible. The 10 year fixed is even lower (I think around 2.75%), but at 3.5%, I'd rather have the lower monthly payments with a 15 year fixed. If I want to pay it off early, I can.

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Calvin Murphy
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Re: Student loan payments: Actual numbers

Postby Calvin Murphy » Sat Oct 24, 2015 5:25 pm

Anonymous User wrote:To piggyback onto the last post, it's also worth considering First Republic Bank. I just refinanced with them 3.5% for 15 year fixed. Pretty incredible. The 10 year fixed is even lower (I think around 2.75%), but at 3.5%, I'd rather have the lower monthly payments with a 15 year fixed. If I want to pay it off early, I can.


Do you mind sharing the amount that you refi'd?

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barkschool
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Re: Student loan payments: Actual numbers

Postby barkschool » Sun Oct 25, 2015 5:35 pm

Anonymous User wrote:To piggyback onto the last post, it's also worth considering First Republic Bank. I just refinanced with them 3.5% for 15 year fixed. Pretty incredible. The 10 year fixed is even lower (I think around 2.75%), but at 3.5%, I'd rather have the lower monthly payments with a 15 year fixed. If I want to pay it off early, I can.


Is it standard to not have early payment penalties from refinancers?

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JenDarby
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Re: Student loan payments: Actual numbers

Postby JenDarby » Sun Oct 25, 2015 5:41 pm

barkschool wrote:
Anonymous User wrote:To piggyback onto the last post, it's also worth considering First Republic Bank. I just refinanced with them 3.5% for 15 year fixed. Pretty incredible. The 10 year fixed is even lower (I think around 2.75%), but at 3.5%, I'd rather have the lower monthly payments with a 15 year fixed. If I want to pay it off early, I can.


Is it standard to not have early payment penalties from refinancers?

Every one I looked into (common bond, sofi, drb)) doesn't have a prepayment penalty, so I'd say yes.

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Re: Student loan payments: Actual numbers

Postby anonnymouse » Sun Oct 25, 2015 9:45 pm

JenDarby wrote:
barkschool wrote:
Anonymous User wrote:To piggyback onto the last post, it's also worth considering First Republic Bank. I just refinanced with them 3.5% for 15 year fixed. Pretty incredible. The 10 year fixed is even lower (I think around 2.75%), but at 3.5%, I'd rather have the lower monthly payments with a 15 year fixed. If I want to pay it off early, I can.


Is it standard to not have early payment penalties from refinancers?

Every one I looked into (common bond, sofi, drb)) doesn't have a prepayment penalty, so I'd say yes.


That is because all student loans (whether Federal or private) have NO prepayment penalty.

All education loans, including federal and private student loans, allow for penalty-free prepayment. This means you can make extra payments to reduce the balance of the loan, or even pay off the entire balance early, without having to pay an extra fee.


Via CommonBond's site, it is illegal to charge a prepayment penalty for student loans.

Under the government’s 2008 Higher Education Opportunity Act, no lender may charge a prepayment penalty to a borrower who pays his or her student loans early. The following is an excerpt from the Act:

“It shall be unlawful for any private educational lender to impose a fee or penalty on a borrower for early repayment or prepayment of any private education loan.”


And here is the fulltext of the Act.

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JohannDeMann
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Re: Student loan payments: Actual numbers

Postby JohannDeMann » Tue Nov 03, 2015 5:15 pm

$260k debt (15k of interest and some more interest when i refi-d with the govt after graduating that I can't track anymore)
Salary 170k
Monthly PAYE payment through the end of 2016: $370
Accumulated $15k in interest in last 2 years
Up about 5k and 8ish% in the market in the last 12 months.

Very pleased with PAYE 1 year in.

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fats provolone
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Re: Student loan payments: Actual numbers

Postby fats provolone » Tue Nov 03, 2015 5:17 pm

JohannDeMann wrote:$260k debt (15k of interest and some more interest when i refi-d with the govt after graduating that I can't track anymore)
Salary 170k
Monthly PAYE payment through the end of 2016: $370
Accumulated $15k in interest in last 2 years
Up about 5k and 8ish% in the market in the last 12 months.

Very pleased with PAYE 1 year in.

when should i re-up my PAYE application to report stub year salary?

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JohannDeMann
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Re: Student loan payments: Actual numbers

Postby JohannDeMann » Tue Nov 03, 2015 5:19 pm

fats provolone wrote:
JohannDeMann wrote:$260k debt (15k of interest and some more interest when i refi-d with the govt after graduating that I can't track anymore)
Salary 170k
Monthly PAYE payment through the end of 2016: $370
Accumulated $15k in interest in last 2 years
Up about 5k and 8ish% in the market in the last 12 months.

Very pleased with PAYE 1 year in.

when should i re-up my PAYE application to report stub year salary?


my people just made me. so i did it now. but you should wait as long as you can. obviously do it before filing 2014 taxes. so if they dont make you reup by february 20th or so, id process the application since it takes a couple weeks.

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hous
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Re: Student loan payments: Actual numbers

Postby hous » Tue Nov 03, 2015 10:42 pm

emkay625 wrote:Posting for advice because this is overwhelming.

120K in loans (including interest). Clerking this year, making 58K. 160K next year. Married, husband makes 55K. We have about 48K in other debt as well (small undergrad student loans (his), car notes, cc debt, bar study loan).

Looking at the options on the loan web site and I have no idea what to choose. Help! Will we even qualify for any of the reduced payment options right now? (I know we won't next year).

Also, what is the best strategy here? Throw everything at loans? Balance between loans and savings?

Also what should I do with 45K (will be like 30K after taxes) clerkship bonus? Just loans? Pay off other debt?


Get on IBR now and make minimum payments. 6 months into make 160k, evaluate whether its worth it to you. If it is, refinance your loans to a lower rate. Then invest in 401k to get employer match (if any), then max HSA (if available), then max IRA, then max 401k. If your interest rate is less than 4%, pay minimum and dump the rest into a taxable brokerage account. If your interest rate is over 4%, dump the rest into your student loans to kill them. Proceed to be financially independent at 45 years old as a millionaire, be a multimillionaire by 50.

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JenDarby
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Re: Student loan payments: Actual numbers

Postby JenDarby » Tue Nov 03, 2015 11:01 pm

Re HSA: contributions in NJ and CA are taxed (lol), so If you live in either of those places, I'd say don't bother

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Danger Zone
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Re: Student loan payments: Actual numbers

Postby Danger Zone » Tue Nov 03, 2015 11:11 pm

JenDarby wrote:Re HSA: contributions in NJ and CA are taxed (lol), so If you live in either of those places, I'd say don't bother

I had no idea...

Gonna have to reexamine. Thanks JD!

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fats provolone
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Re: Student loan payments: Actual numbers

Postby fats provolone » Tue Nov 03, 2015 11:19 pm

fuck this garbage state




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