Student loan payments: Actual numbers

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bk1
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Re: Student loan payments: Actual numbers

Postby bk1 » Tue Sep 27, 2016 1:40 pm

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

You have to decide whether those protections are worth the added cost of the higher interest rate. The middle ground is refinancing part of your loans, but again that's making part of the trade off (you could pay even less by refinancing all of them, you could get more protection by not refinancing at all).

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

Make sure that you have an emergency fund of 3-6 months' expenses. Then pay as aggressive as you want/can. You've listed 3.5k in expenses, but you of course have other bills and necessities (and any wants you have) and your take home is probably around 9k/month. Some people pay 1.5k/month, some people pay nearly 5k/month.

Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Tue Sep 27, 2016 2:20 pm

Anonymous User wrote: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?


Just curious - what kind of charitable monthly donations?

I'd refinance part of your debt and leave the remainder in federal. I am all for paying as much as you can after accumulating 15k or so savings.

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Danger Zone
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Re: Student loan payments: Actual numbers

Postby Danger Zone » Tue Sep 27, 2016 3:28 pm

$1500 in monthly charity donations? Jesus, relax Bill Gates.

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JenDarby
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Re: Student loan payments: Actual numbers

Postby JenDarby » Tue Sep 27, 2016 3:58 pm

Danger Zone wrote:$1500 in monthly charity donations? Jesus, relax Bill Gates.

:lol:

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Re: Student loan payments: Actual numbers

Postby Anonymous User » Tue Sep 27, 2016 4:00 pm

Going to go out on a limb and say tithing on 180K is $1500 a month.

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JenDarby
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Re: Student loan payments: Actual numbers

Postby JenDarby » Tue Sep 27, 2016 4:02 pm

Anonymous User wrote:Going to go out on a limb and say tithing on 180K is $1500 a month.

upon googling I've learned that, according to Christianity Today, it's up for debate whether it is "Robbing God to Tithe on Your After-Tax (Not Gross) Income?"

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bk1
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Re: Student loan payments: Actual numbers

Postby bk1 » Tue Sep 27, 2016 4:04 pm

Have people ITT never interacted with Mormons?

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JenDarby
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Re: Student loan payments: Actual numbers

Postby JenDarby » Tue Sep 27, 2016 4:08 pm

bk1 wrote:Have people ITT never interacted with Mormons?

I am close friends with a few Mormons, but I actually have no idea what their thoughts on pre versus post tax tithing are with regards to robbing God

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bk1
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Re: Student loan payments: Actual numbers

Postby bk1 » Tue Sep 27, 2016 4:20 pm

JenDarby wrote:
bk1 wrote:Have people ITT never interacted with Mormons?

I am close friends with a few Mormons, but I actually have no idea what their thoughts on pre versus post tax tithing are with regards to robbing God

Ah yea, I don't either. What they want to tithe is what they want to tithe, doesn't really matter to me.

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Re: Student loan payments: Actual numbers

Postby Anonymous User » Tue Sep 27, 2016 4:46 pm

I'm currently paying $39 a day in interest. 220k in a combination of federal loans, roughly 6%-7% interest.

If i refinanced, how low could i potentially get my interest rate? what determines that?

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swampthang
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Re: Student loan payments: Actual numbers

Postby swampthang » Tue Sep 27, 2016 4:54 pm

Anonymous User wrote:I'm currently paying $39 a day in interest. 220k in a combination of federal loans, roughly 6%-7% interest.

If i refinanced, how low could i potentially get my interest rate? what determines that?


First Republic- 1.95% (if you qualify geographically, other restrictions); Earnest- 2.20%/3.50%; Sofi- about the same.

What determines your rates? On the one hand, your borrower profile (income, assets- 1RB and Earnest care more about this, credit score- Sofi cares more about this, probably debtload). On the other, the term you select (5, 7, 10-year) and whether you choose variable vs. fixed.

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JenDarby
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Re: Student loan payments: Actual numbers

Postby JenDarby » Tue Sep 27, 2016 4:58 pm

Anonymous User wrote:I'm currently paying $39 a day in interest. 220k in a combination of federal loans, roughly 6%-7% interest.

If i refinanced, how low could i potentially get my interest rate? what determines that?

1.95 through First Republic is the lowest that I have seen, but that would be 5 years fixed so you would be paying a TON each month.

The most reasonable rate/time period I have seen is 2.95 fixed for 10 years with first republic.

Your rates going to depend on debt:income ratio (may need a cosigner if it's not good enough), credit score, and potentially other factors such as savings, employment length, qualifying university, location near a branch, etc.

3-5% variable over 10 years is a very "standard" range to fall in if you meet basic qualifications - but it could be better or worse depending on your individual application.

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Re: Student loan payments: Actual numbers

Postby Anonymous User » Wed Sep 28, 2016 10:27 am

swampthang wrote:
Anonymous User wrote:I'm currently paying $39 a day in interest. 220k in a combination of federal loans, roughly 6%-7% interest.

If i refinanced, how low could i potentially get my interest rate? what determines that?


First Republic- 1.95% (if you qualify geographically, other restrictions); Earnest- 2.20%/3.50%; Sofi- about the same.

What determines your rates? On the one hand, your borrower profile (income, assets- 1RB and Earnest care more about this, credit score- Sofi cares more about this, probably debtload). On the other, the term you select (5, 7, 10-year) and whether you choose variable vs. fixed.


Thank you!

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swampthang
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Re: Student loan payments: Actual numbers

Postby swampthang » Wed Sep 28, 2016 10:28 am

Anonymous User wrote:
swampthang wrote:
Anonymous User wrote:I'm currently paying $39 a day in interest. 220k in a combination of federal loans, roughly 6%-7% interest.

If i refinanced, how low could i potentially get my interest rate? what determines that?


First Republic- 1.95% (if you qualify geographically, other restrictions); Earnest- 2.20%/3.50%; Sofi- about the same.

What determines your rates? On the one hand, your borrower profile (income, assets- 1RB and Earnest care more about this, credit score- Sofi cares more about this, probably debtload). On the other, the term you select (5, 7, 10-year) and whether you choose variable vs. fixed.


Thank you!


No problem. Let me know if you need any other information, referral links, etc.

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Re: Student loan payments: Actual numbers

Postby Anonymous User » Wed Sep 28, 2016 10:30 am

JenDarby wrote:
Anonymous User wrote:I'm currently paying $39 a day in interest. 220k in a combination of federal loans, roughly 6%-7% interest.

If i refinanced, how low could i potentially get my interest rate? what determines that?

1.95 through First Republic is the lowest that I have seen, but that would be 5 years fixed so you would be paying a TON each month.

The most reasonable rate/time period I have seen is 2.95 fixed for 10 years with first republic.

Your rates going to depend on debt:income ratio (may need a cosigner if it's not good enough), credit score, and potentially other factors such as savings, employment length, qualifying university, location near a branch, etc.

3-5% variable over 10 years is a very "standard" range to fall in if you meet basic qualifications - but it could be better or worse depending on your individual application.


Thank you!

I was planning on paying off the entire amount in 3-4 years anyway, so it looks like I am definitely going to refinance. Im ok with paying 4-5k a month and I hate knowing I'm paying over $30 a day in interest!!. I am going to start my loan payments with a single 30k payment, should I refinance BEFORE or after that payment?

Appreciate your advice! Im clueless with this stuff.

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Re: Student loan payments: Actual numbers

Postby Anonymous User » Wed Sep 28, 2016 10:31 am

accidental post

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JenDarby
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Re: Student loan payments: Actual numbers

Postby JenDarby » Wed Sep 28, 2016 10:38 am

How much would draining that 30k affect your overall liquidity?

First republic is by far the best option out there right now if you are in a qualifying area (SF, Palo ago, LA, SB, Newport Beach, SD, Portland OR, Boston, Palm Beach, Greenwich, NYC).

With first republic you will work with a personal banker before they pull your credit and submit your application to their loan committee. I would recommend connecting with a banker there and giving them your complete financial picture. They can advise on whether or not you should pay that down or keep the liquidity before applying. Depending on your income/debt/savings, the improvement to your debt:income may or may not be better than maintaining the liquidity.

For another servicer that is not so heavily concerned with cash liquidity (First Republic generally wants you to have at least 15% of your outstanding loan balance), it might help your rate to first pay that down.

Also, depending on your refi rate and other savings, you may want to hold onto that cash and just accept paying some more in interest over the next few years on a bigger balance while you settle into your career.

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Re: Student loan payments: Actual numbers

Postby Anonymous User » Wed Sep 28, 2016 11:01 am

JenDarby wrote:How much would draining that 30k affect your overall liquidity?

First republic is by far the best option out there right now if you are in a qualifying area (SF, Palo ago, LA, SB, Newport Beach, SD, Portland OR, Boston, Palm Beach, Greenwich, NYC).

With first republic you will work with a personal banker before they pull your credit and submit your application to their loan committee. I would recommend connecting with a banker there and giving them your complete financial picture. They can advise on whether or not you should pay that down or keep the liquidity before applying. Depending on your income/debt/savings, the improvement to your debt:income may or may not be better than maintaining the liquidity.

For another servicer that is not so heavily concerned with cash liquidity (First Republic generally wants you to have at least 15% of your outstanding loan balance), it might help your rate to first pay that down.

Also, depending on your refi rate and other savings, you may want to hold onto that cash and just accept paying some more in interest over the next few years on a bigger balance while you settle into your career.


Thank you. I'm in Texas so it looks like First Republic is a no go. After the 30k payment, we would have about 30k in savings. The 220k debt is all mine and my income is 100k and I have 0 savings. My wife has no debt and an income of 120k, 30k (additional) in savings, she is def willing to sign on as a guarantor or whatever else is needed, would that help me get a better rate? Our initial plan was to do a 30k payment, and then pay 5k a month and put all bonuses towards my 220k debt until it was gone. But it looks like refinancing for the lower interest rate and then paying it off over 5 years makes more sense
Last edited by Anonymous User on Wed Sep 28, 2016 11:03 am, edited 1 time in total.

Anonymous User
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Re: Student loan payments: Actual numbers

Postby Anonymous User » Wed Sep 28, 2016 11:02 am

.

spyke123
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Re: Student loan payments: Actual numbers

Postby spyke123 » Sat Oct 01, 2016 2:14 pm

When is the best time to refi w/ First Republic to get good rates? I just started a few weeks ago and was just wondering if I should be heading to their branch right now or wait until my employment history builds up a little.

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bk1
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Re: Student loan payments: Actual numbers

Postby bk1 » Sat Oct 01, 2016 2:29 pm

spyke123 wrote:When is the best time to refi w/ First Republic to get good rates? I just started a few weeks ago and was just wondering if I should be heading to their branch right now or wait until my employment history builds up a little.

The rates are set, but they are updated every few months. So it's only a question of whether you qualify, not a question of what rates they'll give you.

Having less work history makes it harder to qualify, so you should just reach out to them and see if they think your app will qualify as is or if you would need to wait until you have more employment history.

transfer22
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Re: Student loan payments: Actual numbers

Postby transfer22 » Mon Oct 03, 2016 8:53 pm

Was quoted 3.95% fixed with one company, and 2.91% variable with another company. Not eligible for First Republic because of location. Going to refi about $150k. Any thoughts on which offer I should take? Does anyone have really positive or really negative opinions about any of the refi companies??

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Re: Student loan payments: Actual numbers

Postby Anonymous User » Mon Oct 03, 2016 9:32 pm

Does anyone think that it could make sense to go on PAYE and hope that there is some form of student loan forgiveness program in the next 25 years?

I'll have 140k when I graduate, was planning on paying them down aggressively for a year and a half then refinancing. Have a buddy who insists that refinancing is stupid because the government will bail out student loan holders in the next 10-15 years. I contend that even if substantive student reform happens, they aren't going to be forgiving the loans of corporate lawyers.

Anyone with a policy bent have any thoughts?

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JohannDeMann
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Re: Student loan payments: Actual numbers

Postby JohannDeMann » Tue Oct 04, 2016 12:46 am

Anonymous User wrote:Does anyone think that it could make sense to go on PAYE and hope that there is some form of student loan forgiveness program in the next 25 years?

I'll have 140k when I graduate, was planning on paying them down aggressively for a year and a half then refinancing. Have a buddy who insists that refinancing is stupid because the government will bail out student loan holders in the next 10-15 years. I contend that even if substantive student reform happens, they aren't going to be forgiving the loans of corporate lawyers.

Anyone with a policy bent have any thoughts?


youre gonna pay that all off as long as your salary stays above 90k or so. im kind of banking on some student loan forgiveness programs, but im also holding something like $600k of debt between me and my SO. 140k isnt that bad though. maybe PAYE for a year and make sure you like biglaw? but id probably refi asap and im very confident more forgiveness programs are coming down the pipe - problem is they wont be for high earners.

whysoseriousbiglaw
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Re: Student loan payments: Actual numbers

Postby whysoseriousbiglaw » Tue Oct 04, 2016 10:22 am

JohannDeMann wrote:
Anonymous User wrote:Does anyone think that it could make sense to go on PAYE and hope that there is some form of student loan forgiveness program in the next 25 years?

I'll have 140k when I graduate, was planning on paying them down aggressively for a year and a half then refinancing. Have a buddy who insists that refinancing is stupid because the government will bail out student loan holders in the next 10-15 years. I contend that even if substantive student reform happens, they aren't going to be forgiving the loans of corporate lawyers.

Anyone with a policy bent have any thoughts?


youre gonna pay that all off as long as your salary stays above 90k or so. im kind of banking on some student loan forgiveness programs, but im also holding something like $600k of debt between me and my SO. 140k isnt that bad though. maybe PAYE for a year and make sure you like biglaw? but id probably refi asap and im very confident more forgiveness programs are coming down the pipe - problem is they wont be for high earners.

Are you guys relying on PLSF? Wouldn't the tax bomb be insane with this amount of debt and PAYE?




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