Student loan payments: Actual numbers

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zot1
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Re: Student loan payments: Actual numbers

Postby zot1 » Mon Sep 19, 2016 4:02 pm

FWIW every single attorney I know where I live (small city) who works in the private sector has purchased real estate within a few years from graduation.

I'm not saying you should pick up and leave to another state. I was saying higher cost of living is why I did it.

Although it's true you have the flexibility of picking up and leaving, honestly I feel like I do too. The market for rentals/sales in my neighborhood is consistently good. If I got another job somewhere else (although I'm not looking) it wouldn't be the house that holds me back.

Plus, as a long time renter, I stand by my statement that I was throwing money away. To begin with, every time I had to move because it was cheaper than rent increase, I had to dish out money I'll never see again. When I didn't move, rent went up every year. While rental prices will keep going up, my mortgage payment will remain the same. I don't know about you but I value that a great deal.

Plus, if I'm ever having trouble down the road, I can use the house as a collateral or could sell for the cash. With a rental, you ain't got none of that.

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JenDarby
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Re: Student loan payments: Actual numbers

Postby JenDarby » Mon Sep 19, 2016 4:08 pm

I second most of the above, plus to me there is a significant increase of QOL owning over renting. I moved into my apartment at the end of May and if I were to lease the same apartment today it would cost over $200 more a month. I really look forward to buying a place soon now that I no longer live in NYC. Though, I will likely furnish it at an unusually slow rate.

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MarkinKansasCity
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Re: Student loan payments: Actual numbers

Postby MarkinKansasCity » Mon Sep 19, 2016 4:09 pm

zot1 wrote:FWIW every single attorney I know where I live (small city) who works in the private sector has purchased real estate within a few years from graduation.

I'm not saying you should pick up and leave to another state. I was saying higher cost of living is why I did it.

Although it's true you have the flexibility of picking up and leaving, honestly I feel like I do too. The market for rentals/sales in my neighborhood is consistently good. If I got another job somewhere else (although I'm not looking) it wouldn't be the house that holds me back.

Plus, as a long time renter, I stand by my statement that I was throwing money away. To begin with, every time I had to move because it was cheaper than rent increase, I had to dish out money I'll never see again. When I didn't move, rent went up every year. While rental prices will keep going up, my mortgage payment will remain the same. I don't know about you but I value that a great deal.

Plus, if I'm ever having trouble down the road, I can use the house as a collateral or could sell for the cash. With a rental, you ain't got none of that.


I really wish people would stop characterizing renting as "throwing money away" in comparison to buying a home. Buying a house is a leveraged real estate play. Nothing more, nothing less. Overall, maintenance costs, taxes, insurance, and other expenses related to owning a home generally cancel out whatever equity you're accumulating. The exception would be abnormal appreciation of the property. Owning a home is also a giant time suck. Instead of calling your landlord you get to play general contractor any time your place needs work.

It makes sense to buy a house if you live in an area where property values are appreciating quickly, but that's pretty much it from a purely financial perspective. Homeownership is a pain in the ass.

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dailygrind
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Re: Student loan payments: Actual numbers

Postby dailygrind » Mon Sep 19, 2016 4:12 pm

I could probably put together a downpayment in a year or so if I wanted, but why bother when I have no idea if I'm going to live here 3 years from now? Renting is paying for mobility, and that's worth a lot for a big law lawyer.

zot1
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Re: Student loan payments: Actual numbers

Postby zot1 » Mon Sep 19, 2016 4:13 pm

How about this, rent was throwing away money for myself?

To put it in perspective for y'all, after living in LA for 8 years, I spent over 100k in rent. This does not include extra fees I got for pets or parking or moving costs, etc.

Do you know what I have to show for that money? The good and lovely memories of living in small apartments with noisy neighbors in LA. Can't say I'd trade that for anything!

Again, this is my personal experience. Perhaps renting is best for everyone else.

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swampthang
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Re: Student loan payments: Actual numbers

Postby swampthang » Mon Sep 19, 2016 4:28 pm

zot1 wrote:How about this, rent was throwing away money for myself?

To put it in perspective for y'all, after living in LA for 8 years, I spent over 100k in rent. This does not include extra fees I got for pets or parking or moving costs, etc.

Do you know what I have to show for that money? The good and lovely memories of living in small apartments with noisy neighbors in LA. Can't say I'd trade that for anything!

Again, this is my personal experience. Perhaps renting is best for everyone else.


Flexibility, optionality, insurance, smooth and predictable cash flows, no maintenance obligations. If you rented through the recession, you had the option to buy low in 2008 instead of trying to sell at a massive discount-- that could be worth six figures if you were moving during that time. I know these things aren't tangible, but they're valuable nonetheless. Real estate's tangibility is probably why people are so fixated on it vs. more abstract financial investments. Have you ever compared your unrecoverable expenses (interest and property taxes net any income tax deduction, HOA, maintenance and repairs, closing costs, brokers' fees) from owning to buying? That may be apples to kumquats since you don't live in LA anymore, but it could be illustrative.

That said, I think we all agree about the general point: if you're planning on living in the exact same place for 30 years, then yes, buying makes sense. For many people on this board-- recent law school graduates, living in expensive urban areas, uncertain partnership prospects or interest-- the flexibility makes sense, at least for the time being.

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JenDarby
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Re: Student loan payments: Actual numbers

Postby JenDarby » Mon Sep 19, 2016 4:41 pm

If only I could live in my law school loans!! (the payment of which is higher than my monthly rent and proposed mortgage payment)

Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Mon Sep 19, 2016 4:49 pm

swampthang wrote:
Anonymous User wrote:My mortgage (just bought) and student loans send something close to 6,500 out the door on the first every month. Furnishing a new home is insanely expensive. We budget, but we more force savings. So something like 3k/month goes to a bank we never look at, but that is from mine and my SOs salary.Oh and the downpay was not much for people thinking I save plenty already having a down. Professional lending programs basically give mortgages with nothing down these days. (No, I am not in NY, but market paying city).


^^Tell me more. Given our income and likely purchase price, I haven't seen anything less than 10% down, but I'm happy to be proven wrong.


I believe 5% was the absolute minimum down on a 1/2 million place (but that equated to a higher interest rate). I put 10% down.

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Mlk&Ckies
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Re: Student loan payments: Actual numbers

Postby Mlk&Ckies » Mon Sep 19, 2016 5:00 pm

swampthang wrote:
zot1 wrote:How about this, rent was throwing away money for myself?

To put it in perspective for y'all, after living in LA for 8 years, I spent over 100k in rent. This does not include extra fees I got for pets or parking or moving costs, etc.

Do you know what I have to show for that money? The good and lovely memories of living in small apartments with noisy neighbors in LA. Can't say I'd trade that for anything!

Again, this is my personal experience. Perhaps renting is best for everyone else.


Flexibility, optionality, insurance, smooth and predictable cash flows, no maintenance obligations. If you rented through the recession, you had the option to buy low in 2008 instead of trying to sell at a massive discount-- that could be worth six figures if you were moving during that time. I know these things aren't tangible, but they're valuable nonetheless. Real estate's tangibility is probably why people are so fixated on it vs. more abstract financial investments. Have you ever compared your unrecoverable expenses (interest and property taxes net any income tax deduction, HOA, maintenance and repairs, closing costs, brokers' fees) from owning to buying? That may be apples to kumquats since you don't live in LA anymore, but it could be illustrative.

That said, I think we all agree about the general point: if you're planning on living in the exact same place for 30 years, then yes, buying makes sense. For many people on this board-- recent law school graduates, living in expensive urban areas, uncertain partnership prospects or interest-- the flexibility makes sense, at least for the time being.


This. Pretending there's some kind of magic formula that makes sense for everyone is obnoxiously simplistic.

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swampthang
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Re: Student loan payments: Actual numbers

Postby swampthang » Mon Sep 19, 2016 5:16 pm

Anonymous User wrote:
swampthang wrote:
Anonymous User wrote:My mortgage (just bought) and student loans send something close to 6,500 out the door on the first every month. Furnishing a new home is insanely expensive. We budget, but we more force savings. So something like 3k/month goes to a bank we never look at, but that is from mine and my SOs salary.Oh and the downpay was not much for people thinking I save plenty already having a down. Professional lending programs basically give mortgages with nothing down these days. (No, I am not in NY, but market paying city).


^^Tell me more. Given our income and likely purchase price, I haven't seen anything less than 10% down, but I'm happy to be proven wrong.


I believe 5% was the absolute minimum down on a 1/2 million place (but that equated to a higher interest rate). I put 10% down.


PMI till you hit 20% equity?

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gk101
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Re: Student loan payments: Actual numbers

Postby gk101 » Mon Sep 19, 2016 5:52 pm

swampthang wrote:
Anonymous User wrote:
swampthang wrote:
Anonymous User wrote:My mortgage (just bought) and student loans send something close to 6,500 out the door on the first every month. Furnishing a new home is insanely expensive. We budget, but we more force savings. So something like 3k/month goes to a bank we never look at, but that is from mine and my SOs salary.Oh and the downpay was not much for people thinking I save plenty already having a down. Professional lending programs basically give mortgages with nothing down these days. (No, I am not in NY, but market paying city).


^^Tell me more. Given our income and likely purchase price, I haven't seen anything less than 10% down, but I'm happy to be proven wrong.


I believe 5% was the absolute minimum down on a 1/2 million place (but that equated to a higher interest rate). I put 10% down.


PMI till you hit 20% equity?

SoFi does 10% down with no PMI I believe

zot1
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Re: Student loan payments: Actual numbers

Postby zot1 » Mon Sep 19, 2016 6:16 pm

Mlk&Ckies wrote:
swampthang wrote:
zot1 wrote:How about this, rent was throwing away money for myself?

To put it in perspective for y'all, after living in LA for 8 years, I spent over 100k in rent. This does not include extra fees I got for pets or parking or moving costs, etc.

Do you know what I have to show for that money? The good and lovely memories of living in small apartments with noisy neighbors in LA. Can't say I'd trade that for anything!

Again, this is my personal experience. Perhaps renting is best for everyone else.


Flexibility, optionality, insurance, smooth and predictable cash flows, no maintenance obligations. If you rented through the recession, you had the option to buy low in 2008 instead of trying to sell at a massive discount-- that could be worth six figures if you were moving during that time. I know these things aren't tangible, but they're valuable nonetheless. Real estate's tangibility is probably why people are so fixated on it vs. more abstract financial investments. Have you ever compared your unrecoverable expenses (interest and property taxes net any income tax deduction, HOA, maintenance and repairs, closing costs, brokers' fees) from owning to buying? That may be apples to kumquats since you don't live in LA anymore, but it could be illustrative.

That said, I think we all agree about the general point: if you're planning on living in the exact same place for 30 years, then yes, buying makes sense. For many people on this board-- recent law school graduates, living in expensive urban areas, uncertain partnership prospects or interest-- the flexibility makes sense, at least for the time being.


This. Pretending there's some kind of magic formula that makes sense for everyone is obnoxiously simplistic.


My original post on this topic was entirely about myself "this is why I did this" "I'm better off by it"... I never implied this was the formula for everyone to follow.

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Nebby
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Re: Student loan payments: Actual numbers

Postby Nebby » Mon Sep 19, 2016 6:27 pm

We're all obnoxiously simple ITT

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swampthang
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Re: Student loan payments: Actual numbers

Postby swampthang » Tue Sep 20, 2016 10:09 am

gk101 wrote:
swampthang wrote:
Anonymous User wrote:
swampthang wrote:
Anonymous User wrote:My mortgage (just bought) and student loans send something close to 6,500 out the door on the first every month. Furnishing a new home is insanely expensive. We budget, but we more force savings. So something like 3k/month goes to a bank we never look at, but that is from mine and my SOs salary.Oh and the downpay was not much for people thinking I save plenty already having a down. Professional lending programs basically give mortgages with nothing down these days. (No, I am not in NY, but market paying city).


^^Tell me more. Given our income and likely purchase price, I haven't seen anything less than 10% down, but I'm happy to be proven wrong.


I believe 5% was the absolute minimum down on a 1/2 million place (but that equated to a higher interest rate). I put 10% down.


PMI till you hit 20% equity?

SoFi does 10% down with no PMI I believe


So i ran through Sofi's mortgage pre-approval. First off, it doesn't look like you can get a mortgage through them for property in MA, NH, NY, UT, WV, and maybe a few others. Second, they quoted me 4.5% for a 30-year fixed, which is a full point higher than the 3.5% my local credit union quotes me. Obviously everybody should conduct their own research on what turns out to be the best rate for them, but this is just another brick in my wall of skepticism about Sofi.

Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Tue Sep 20, 2016 11:26 pm

You can get a conventional (non FHA) mortgage with 5% down through traditional banks. I did this one year ago with Chase. It's true that you pay PMI until 21.5% loan to value ratio. To quicken the removal of PMI you can pay extra on your mortgage or if home values do up get a new appraisal that increases your percentage - or a combination of the two.

My mortgage payment for my 3 bed 2 bath house with a big garage and backyard - with PMI, taxes and insurance escrows is about the same as rent for a 2 bed 1 bath apartment in my area. And an even bigger bonus is that my monthly payment will stay the same every month for the next 29 years (actually it will go down when PMI is removed), compared to renting where each year you creep up and up.

Home ownership isn't for everyone - and I can especially understand that for those who don't expect to stay in a locale beyond a couple of years - but long term I don't think there is a single model where renting is a better financial play.

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JenDarby
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Re: Student loan payments: Actual numbers

Postby JenDarby » Wed Sep 21, 2016 12:22 am

^ not that it's a life changing amount, but 21.5% should just be the time the system automatically kicks off the PMI. You can call the second you hit 20% and have it removed as well.

zot1
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Re: Student loan payments: Actual numbers

Postby zot1 » Wed Sep 21, 2016 8:40 am

JenDarby wrote:^ not that it's a life changing amount, but 21.5% should just be the time the system automatically kicks off the PMI. You can call the second you hit 20% and have it removed as well.


This is what I was told as well.

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swampthang
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Re: Student loan payments: Actual numbers

Postby swampthang » Wed Sep 21, 2016 10:26 am

Anonymous User wrote:You can get a conventional (non FHA) mortgage with 5% down through traditional banks. I did this one year ago with Chase. It's true that you pay PMI until 21.5% loan to value ratio. To quicken the removal of PMI you can pay extra on your mortgage or if home values do up get a new appraisal that increases your percentage - or a combination of the two.


Yes, but it needs to be a non-jumbo mortgage, which is tough to come by for much more than 1 BR in a high-cost area.

The appraisal route is clever- how much do those typically run?

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Re: Student loan payments: Actual numbers

Postby Anonymous User » Wed Sep 21, 2016 11:52 am

swampthang wrote:
Anonymous User wrote:You can get a conventional (non FHA) mortgage with 5% down through traditional banks. I did this one year ago with Chase. It's true that you pay PMI until 21.5% loan to value ratio. To quicken the removal of PMI you can pay extra on your mortgage or if home values do up get a new appraisal that increases your percentage - or a combination of the two.


Yes, but it needs to be a non-jumbo mortgage, which is tough to come by for much more than 1 BR in a high-cost area.

The appraisal route is clever- how much do those typically run?


depends on home size - but around $300 for a 1500 square foot home.

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Re: Student loan payments: Actual numbers

Postby Anonymous User » Wed Sep 21, 2016 12:19 pm

zot1 wrote:
JenDarby wrote:^ not that it's a life changing amount, but 21.5% should just be the time the system automatically kicks off the PMI. You can call the second you hit 20% and have it removed as well.


This is what I was told as well.


Thanks for the tip. Home values in my area had been going up at double-digit increases for the past few years, so we decided to take the gamble and buy despite not having much for a downpayment. We look forward to the day we get off PMI and get to pocket an extra $150 each month.

zot1
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Re: Student loan payments: Actual numbers

Postby zot1 » Wed Sep 21, 2016 12:34 pm

Anonymous User wrote:
zot1 wrote:
JenDarby wrote:^ not that it's a life changing amount, but 21.5% should just be the time the system automatically kicks off the PMI. You can call the second you hit 20% and have it removed as well.


This is what I was told as well.


Thanks for the tip. Home values in my area had been going up at double-digit increases for the past few years, so we decided to take the gamble and buy despite not having much for a downpayment. We look forward to the day we get off PMI and get to pocket an extra $150 each month.


I pulled the trigger because it was cheaper to rent, my house is bigger than most rentals at the same price, and the price of the monthly payment, like you mentioned, doesn't go up but instead goes down. Oh and I no longer have to pay pet rent which is the stupidest crap imo.

Plus, the rewards of being a homeowner are ridiculously awesome. Not only do I get to be creative and do projects with the house and whatnot, but also, I never have to get a call from a landlord that they need to come in and do whatever crap.

Honestly, I've done a lot of stupid crap in my life, but this investment is something I absolutely do not regret. I also look forward to writing off the mortgage interest in my next tax filing.

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Re: Student loan payments: Actual numbers

Postby Anonymous User » Wed Sep 21, 2016 12:48 pm

swampthang wrote:
Anonymous User wrote:
Anonymous User wrote:Class of 2013; CCN; Biglaw

Debt at Graduation: Law School ($87,000); Undergraduate ($11,000)
Factors: Full Ride for Law School (COA in New York though); Refinanced with SoFi (3.31%)
Current Debt: $49,000
Salary: $190,000 (Switched practice groups)
Monthly Payment ($543 $520 minimum; I often pay double this amount and sometimes pay four times the required amount)

Cash: $15,000 savings; $5,000 checking
Taxable: $15,000 brokerage
Tax Advantaged: $53,000

Takeaway: Paying down debt is hard; especially when trying to stock away money for a rainy day. I'm trying to get better at this this year (one of my top goals) and will likely be throwing the full strength of my bonus at the debt.


Financially savvy people; how would you proceed in this scenario? What would you be doing over the next six months with my paycheck. Should I consider refinancing my refinance? I would also like to buy a house but nervous about pulling the trigger with outstanding debt.


Edited because this really belongs in the Personal Finance Thread. Not clogging up this one. (Re-added because I can't be anonymous there)
Last edited by Anonymous User on Wed Sep 21, 2016 12:54 pm, edited 2 times in total.

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swampthang
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Re: Student loan payments: Actual numbers

Postby swampthang » Wed Sep 21, 2016 12:49 pm

Anonymous User wrote:
Anonymous User wrote:Class of 2013; CCN; Biglaw

Debt at Graduation: Law School ($87,000); Undergraduate ($11,000)
Factors: Full Ride for Law School (COA in New York though); Refinanced with SoFi (3.31%)
Current Debt: $49,000
Salary: $190,000 (Switched practice groups)
Monthly Payment ($543 $520 minimum; I often pay double this amount and sometimes pay four times the required amount)

Cash: $15,000 savings; $5,000 checking
Taxable: $15,000 brokerage
Tax Advantaged: $53,000

Takeaway: Paying down debt is hard; especially when trying to stock away money for a rainy day. I'm trying to get better at this this year (one of my top goals) and will likely be throwing the full strength of my bonus at the debt.


Financially savvy people; how would you proceed in this scenario? What would you be doing over the next six months with my paycheck. Should I consider refinancing my refinance? I would also like to buy a house but nervous about pulling the trigger with outstanding debt.


Sure, if refinancing gets you better terms, then the only thing holding you back is the paperwork and a credit pull.

Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Wed Sep 21, 2016 12:52 pm

swampthang wrote:
Anonymous User wrote:
Anonymous User wrote:Class of 2013; CCN; Biglaw

Debt at Graduation: Law School ($87,000); Undergraduate ($11,000)
Factors: Full Ride for Law School (COA in New York though); Refinanced with SoFi (3.31%)
Current Debt: $49,000
Salary: $190,000 (Switched practice groups)
Monthly Payment ($543 $520 minimum; I often pay double this amount and sometimes pay four times the required amount)

Cash: $15,000 savings; $5,000 checking
Taxable: $15,000 brokerage
Tax Advantaged: $53,000

Takeaway: Paying down debt is hard; especially when trying to stock away money for a rainy day. I'm trying to get better at this this year (one of my top goals) and will likely be throwing the full strength of my bonus at the debt.


Financially savvy people; how would you proceed in this scenario? What would you be doing over the next six months with my paycheck. Should I consider refinancing my refinance? I would also like to buy a house but nervous about pulling the trigger with outstanding debt.


Sure, if refinancing gets you better terms, then the only thing holding you back is the paperwork and a credit pull.


Thanks. I'll take a look. My quote was 3.06 so I'll need to complete the paperwork this weekend.

Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Tue Sep 27, 2016 1:32 pm

Hi everyone, I'm a recent graduate who just started work and am now starting to get bombarded with emails about refinancing, deferments, and repayments. I have no clue as to what to do....please please please please help!!

My situation:

Class of 2016, MVP, Biglaw in NY
Debt at graduation: no undergraduate debt, but law school at sticker price

Current Debt: 7 separate federal loans (direct unconsolidated and PLUS) with an average combined interest rate of 6.5 % and a combined total (including interest) of about $198,000.

Salary: $180,000

Other payments to make: around $2000 in rent and about $1500 in charitable monthly donations

As of now, I'm looking to pay off these loans as fast as possible.

Should I be refinancing? On the one hand, I don't want to lose the various protections that the federal government provides.

How much would you say is a good amount for making aggressive monthly payments without breaking my back?




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