Student loan payments: Actual numbers

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Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Sun May 01, 2016 5:29 pm

biglaw corp with no intention of heading to govt, but I will have LIPP. should I refinance? should I refinance a third of my debt (is this possible?) and pay that off first while working down the rest?

Also, is there a penalty for early repayment on refinanced debt?

Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Sun May 01, 2016 5:37 pm

Not sure if right place to post, but thought you guys might be helpful.
Soon-to-be grad (K-JD) with question about how to approach repayment, refinancing, etc.

Loans: $95k (includes credit card, SO/my student loans) - took full-tuition scholly and ran (UG & LS)
Projected income: $120,000 in a secondary market with low COL [not considering what SO's new job in new city will bring, but he is PI sector, so I'd like to budget it just on this]

Ideal Plan: Knock out ~$20,000 in CC debt --> wipe out student loans
Actual Plan: Don't know where to begin planning. We are nwebs and just started budgeting consistently and doing grown up stuff (#millenials).

Questions:
1) Where do I learn what my options are as far as refinancing? Do I have to/should I do this?
2) What's the best plan for us? SO and I want to be debt free ASAP.
3) I want to max out tax-free contributions, but not sure if appropriate before paying off debt?
4) What are some basic finance tools/books/websites that we can learn information from?
5) Where/how does one find a financial planner--would they be helpful to us at this point?

Any advice is appreciated. If I need to move this elsewhere, let me know!

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Mlk&Ckies
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Re: Student loan payments: Actual numbers

Postby Mlk&Ckies » Sun May 01, 2016 5:41 pm

Go on PAYE (if you qualify) and then don't pay off or buy anything unnecessary until you pay off your CC debt. $20k in CC is way too much.

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t-14orbust
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Re: Student loan payments: Actual numbers

Postby t-14orbust » Sun May 01, 2016 5:44 pm

Mlk&Ckies wrote:Go on PAYE (if you qualify) and then don't pay off or buy anything unnecessary until you pay off your CC debt. $20k in CC is way too much.


yeah, damn. is that at 20%?

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JohannDeMann
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Re: Student loan payments: Actual numbers

Postby JohannDeMann » Sun May 01, 2016 5:54 pm

Anonymous User wrote:Not sure if right place to post, but thought you guys might be helpful.
Soon-to-be grad (K-JD) with question about how to approach repayment, refinancing, etc.

Loans: $95k (includes credit card, SO/my student loans) - took full-tuition scholly and ran (UG & LS)
Projected income: $120,000 in a secondary market with low COL [not considering what SO's new job in new city will bring, but he is PI sector, so I'd like to budget it just on this]

Ideal Plan: Knock out ~$20,000 in CC debt --> wipe out student loans
Actual Plan: Don't know where to begin planning. We are nwebs and just started budgeting consistently and doing grown up stuff (#millenials).

Questions:
1) Where do I learn what my options are as far as refinancing? Do I have to/should I do this?
2) What's the best plan for us? SO and I want to be debt free ASAP.
3) I want to max out tax-free contributions, but not sure if appropriate before paying off debt?
4) What are some basic finance tools/books/websites that we can learn information from?
5) Where/how does one find a financial planner--would they be helpful to us at this point?

Any advice is appreciated. If I need to move this elsewhere, let me know!


You should def get on PAYE or REPAYE and knock out the credit card debt first to knock off higher paying interest things. Then refinance your other loans at a lower rate with a private lender for a 5 year term. Max out tax free contributions always.

You're too poor now to have a financial advisor. Do the above. Don't buy the stupid shit you bought to get in 20k of cc debt.

Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Sun May 01, 2016 6:14 pm

Thanks for all the quick and helpful comments. Would you recommend something like SoFi? It seems like the most talked about/recommended one here.

It's embarrassing to say, but yes, we were idiots for relying on CCs during UG/LS preparation. Lesson learned, no longer using them, just haven't been able to knock much of it off while I've been in school + paying SO's loans. We are married, btw, not just random SO.

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El Pollito
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Re: Student loan payments: Actual numbers

Postby El Pollito » Sun May 01, 2016 6:19 pm

my repaye package looks so good that i might just say on it instead of taking the refi even though my loans will get fully paid off and not forgiven

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El Pollito
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Re: Student loan payments: Actual numbers

Postby El Pollito » Sun May 01, 2016 6:19 pm

Anonymous User wrote:Thanks for all the quick and helpful comments. Would you recommend something like SoFi? It seems like the most talked about/recommended one here.

It's embarrassing to say, but yes, we were idiots for relying on CCs during UG/LS preparation. Lesson learned, no longer using them, just haven't been able to knock much of it off while I've been in school + paying SO's loans. We are married, btw, not just random SO.

i don't think you're going to qualify for sofi if you're horrible with your CC

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Mlk&Ckies
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Re: Student loan payments: Actual numbers

Postby Mlk&Ckies » Sun May 01, 2016 6:21 pm

Do not refinance until you pay off your CC debt. Going on PAYE for a year and incurring the extra interest will be better than paying 15-29% on the CC debt. You literally should not be paying a penny more in you student loan debt than necessary until those CCs are gone.

And the interest on your loans capitalizes only once when you graduate. After that, you'll be incurring huge, compounding interest on CCs and only simple interest on PAYE.

Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Sun May 01, 2016 6:31 pm

Makes sense! Thanks again.

ballouttacontrol
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Re: Student loan payments: Actual numbers

Postby ballouttacontrol » Sun May 01, 2016 8:52 pm

If you have been good about making all of your payments you could still have an excellent credit rating. Carrying a balance is not a negative for your credit as long as you make your payments.

If you have been, and thus have decent credit, you should apply for a few 0% interest introductory period credit cards. With good credit, each card should have a credit line of like $8k+, so 2-3 credit cards should do it. Then, you can balance transfer all of your high interest CC debt to these cards, and pay them off at your leisure, as long as you get them paid off by the end of the 0% period (which varies from like 9-18 months). A balance transfer typically will have a one time fee of approx. 3-5%, but paying 4% on $20k once and then no interest is probably a lot better than slowly paying off $20k at 24.99% interest.

Depends how fast you can reasonably pay it off though. Easy enough to run the math yourself in excel based on your own income and expenses. If your start date isn't until after the bar, let's say Sept. 1, in the next 4 months ($20k @ 24.99%, disregarding minimum payments), you would have already accrued $1719 in interest before you even start to make $$$. Whereas a 4% balance transfer would be a one time fee of $800.

If you go the balance transfer route, DEFINITELY apply for the Chase Slate card. Don't use it to buy anything, because it has shit rewards, but it has 0% balance transfer fee and a 15 month 0% interest period. This is the only one I know of with 0% balance transfer and 0% interest period. If anyone knows of another, please let me know!!! :)
Last edited by ballouttacontrol on Sun May 01, 2016 9:04 pm, edited 1 time in total.

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Mlk&Ckies
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Re: Student loan payments: Actual numbers

Postby Mlk&Ckies » Sun May 01, 2016 8:58 pm

Definitely a good idea.

utilizing that much revolving credit, though, is really bad for your credit, unless you have like $100,000 limit, and even then 20% utilization isn't great

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El Pollito
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Re: Student loan payments: Actual numbers

Postby El Pollito » Sun May 01, 2016 9:39 pm

i'm just guessing a person with that much CC debt doesn't have amazing credit, but i could be wrong.

Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Sun May 01, 2016 10:43 pm

Graduating 3L here

When should I apply to consolidate my loans? And when should I apply for paye if my deferment ends in December?

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Mlk&Ckies
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Re: Student loan payments: Actual numbers

Postby Mlk&Ckies » Sun May 01, 2016 10:45 pm

Consolidation is stupid. Don't.

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Roundhill
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Re: Student loan payments: Actual numbers

Postby Roundhill » Sun May 01, 2016 11:19 pm

Anonymous User wrote:Not sure if right place to post, but thought you guys might be helpful.
Soon-to-be grad (K-JD) with question about how to approach repayment, refinancing, etc.

Loans: $95k (includes credit card, SO/my student loans) - took full-tuition scholly and ran (UG & LS)
Projected income: $120,000 in a secondary market with low COL [not considering what SO's new job in new city will bring, but he is PI sector, so I'd like to budget it just on this]

Ideal Plan: Knock out ~$20,000 in CC debt --> wipe out student loans
Actual Plan: Don't know where to begin planning. We are nwebs and just started budgeting consistently and doing grown up stuff (#millenials).

Questions:
1) Where do I learn what my options are as far as refinancing? Do I have to/should I do this?
2) What's the best plan for us? SO and I want to be debt free ASAP.
3) I want to max out tax-free contributions, but not sure if appropriate before paying off debt?
4) What are some basic finance tools/books/websites that we can learn information from?
5) Where/how does one find a financial planner--would they be helpful to us at this point?

Any advice is appreciated. If I need to move this elsewhere, let me know!


I can't believe you have 20k in high interest credit card debt. Definitely pay that off first.

WinSome
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Re: Student loan payments: Actual numbers

Postby WinSome » Mon May 02, 2016 6:07 am

.
Last edited by WinSome on Wed Jun 08, 2016 1:41 pm, edited 1 time in total.

Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Mon May 02, 2016 6:44 am

.

ballouttacontrol
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Re: Student loan payments: Actual numbers

Postby ballouttacontrol » Mon May 02, 2016 6:45 am

WinSome wrote:Debt: about 200k (undergrad and law combined; 145k that I am personally liable for, all through Fed; 55k my parents took out in ParentPlus loans to help with undergrad, also through Fed)
Payments: $1.6k per month on standard, not inclusive of parent loans
Income: $160k, biglaw satellite in lower COL secondary market
Plan: Standard
Important info: I know that I am technically not liable for the loans my parents took out, but I am going to pay so I am treating them as my own. I can't just PAYE the parent loans because they are not in my name.

I start my job in the fall at firm that pays New York salary and bonuses in a lower COL market. Right now my plan is aggressive debt repayment, $50k a year if possible. I'd like to make some contributions to my 401k without maxing out. My firm doesn't do matching and my loans have an average interest rate of like 6.4% so I think it beats investing. I'm also looking for advice on whether I can somehow get my parents' loans in my name. Right now I think I can give them up to 28k a year without having to fill out gift tax forms. I'm hoping to have my loans paid off within 5 years. I might look into refinancing after I feel more secure at my job. I know there are some strong advocates for PAYE on this board, but I don't think its ideal for my situation, partially because I'd feel much more comfortable with this debt off my back ASAP. I'd appreciate any advice.


Typically it's a simple process to transfer a loan to your name as long as you have good credit-just go to the original lender and ask. If for some reason they won't b/c of the "parent" nature of it or something weird like that, you could refinance it in your name. Keep in mind you might get a much higher interest rate on your own than they originally got however many years ago.

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Mlk&Ckies
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Re: Student loan payments: Actual numbers

Postby Mlk&Ckies » Mon May 02, 2016 6:28 pm

ballouttacontrol wrote:
WinSome wrote:Debt: about 200k (undergrad and law combined; 145k that I am personally liable for, all through Fed; 55k my parents took out in ParentPlus loans to help with undergrad, also through Fed)
Payments: $1.6k per month on standard, not inclusive of parent loans
Income: $160k, biglaw satellite in lower COL secondary market
Plan: Standard
Important info: I know that I am technically not liable for the loans my parents took out, but I am going to pay so I am treating them as my own. I can't just PAYE the parent loans because they are not in my name.

I start my job in the fall at firm that pays New York salary and bonuses in a lower COL market. Right now my plan is aggressive debt repayment, $50k a year if possible. I'd like to make some contributions to my 401k without maxing out. My firm doesn't do matching and my loans have an average interest rate of like 6.4% so I think it beats investing. I'm also looking for advice on whether I can somehow get my parents' loans in my name. Right now I think I can give them up to 28k a year without having to fill out gift tax forms. I'm hoping to have my loans paid off within 5 years. I might look into refinancing after I feel more secure at my job. I know there are some strong advocates for PAYE on this board, but I don't think its ideal for my situation, partially because I'd feel much more comfortable with this debt off my back ASAP. I'd appreciate any advice.


Typically it's a simple process to transfer a loan to your name as long as you have good credit-just go to the original lender and ask. If for some reason they won't b/c of the "parent" nature of it or something weird like that, you could refinance it in your name. Keep in mind you might get a much higher interest rate on your own than they originally got however many years ago.


This is absolutely not true with Parent Plus loans. The Feds are very clear that they will not transfer a Parent Plus loan to the student. The only way to do it is a refi.

Parent Plus loans have the same shittily high interest rate as Grad Plus loans do, so it's probably well north of anything WinSome could get through refi unless s/he has shitty credit. I'm pretty sure SoFi handles Parent Plus ---> Private Loan in Student's Name loans pretty regularly.

If you want to aggressively attack debt, I'd definitely refi in this situation. However, I'm not sure it's a good idea to not max out 401k, even if your firm doesn't match. You'll likely get a rate much lower than 6.4% on a refi'd loan, and the tax savings + long term potential of $18k/year is too good to pass up. Every year you're one year closer to retirement and you'll never get that time back.

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pdevastey
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Re: Student loan payments: Actual numbers

Postby pdevastey » Thu May 05, 2016 10:14 am

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Last edited by pdevastey on Mon May 09, 2016 3:41 pm, edited 1 time in total.

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JenDarby
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Re: Student loan payments: Actual numbers

Postby JenDarby » Thu May 05, 2016 10:17 am

Anonymous User wrote:I will be looking at graduating with at least 160k(not calculating Interest) debt from Penn law. This is ignoring 1L and 2L summer income. Is this financial suicide? :(

I mean this in the kindest way, please just read some of this thread before asking such a basic question. The answer is no.

Do some basic thread searches and you can find sufficient "success" stories with both PAYE and refinancing at that level of debt.

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Nebby
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Re: Student loan payments: Actual numbers

Postby Nebby » Fri May 06, 2016 9:32 pm

It's possible to put some fed direct loans on PAYE and keep others at the standard 10 year repayment, right? I don't see why not, but I just want to make sure

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JenDarby
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Re: Student loan payments: Actual numbers

Postby JenDarby » Fri May 06, 2016 9:43 pm

Nebby wrote:It's possible to put some fed direct loans on PAYE and keep others at the standard 10 year repayment, right? I don't see why not, but I just want to make sure

Why would you want to do this? PAYE doesn't prevent you from paying off your loans in 10 years...but provides benefits. My guess would be it's not possible though since the gov loan servicers don't want to cater to any needs, let alone particular needs.

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JohannDeMann
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Re: Student loan payments: Actual numbers

Postby JohannDeMann » Fri May 06, 2016 10:12 pm

Nebby wrote:It's possible to put some fed direct loans on PAYE and keep others at the standard 10 year repayment, right? I don't see why not, but I just want to make sure


i dont think so. this isnt a mix and match policy grab bag. PAYE is for people that cant afford payments and standard repayments are not.

however, you can juts lock in PAYE and make the standard payment yourself on loans you choose above and beyond the regular repayment schedule.




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