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SmokeytheBear wrote:

Anonymous User wrote:$193,971 loan balance
average rate of 6.4%
Car/Consumer Debt payment ~500/month
Biglaw 180k

help please?

Does consumer debt = credit card?

It is a 4k bar loan with ~18% interest I believe.

Anonymous User wrote:

SmokeytheBear wrote:

Anonymous User wrote:$193,971 loan balance
average rate of 6.4%
Car/Consumer Debt payment ~500/month
Biglaw 180k

help please?

Does consumer debt = credit card?

It is a 4k bar loan with ~18% interest I believe.

All of this depends at least a bit on how risk averse you are and how long you plan to be in big law. But this is the general advice:

1. Make minimum payments on your loans and pay off that bar loan as aggressively as possible.

2. Start building up an emergency fund savings account. People have differences on how much they think it should be depending on how risk averse they are, but the theory ranges from three to six months of living expenses.

3. Refinance at least a portion of your loans. The best option for you since you are biglaw is with First Repbulic. You have to refinance at least $60,000 and be in one of their zones (San Francisco, Palo Alto, Los Angeles, Santa Barbara, Newport Beach, San Diego, Portland (Oregon), Boston, Palm Beach (Florida), Greenwich or New York City), as well as several other requirements. One of us can get you a referral code so you get $200 upon opening your account and we get $300. Otherwise refinance with one of the other options like SoFi or Common Bond.

Anonymous User wrote:

SmokeytheBear wrote:

Anonymous User wrote:$193,971 loan balance
average rate of 6.4%
Car/Consumer Debt payment ~500/month
Biglaw 180k

help please?

Does consumer debt = credit card?

It is a 4k bar loan with ~18% interest I believe.

(presuming your car loan is <6.4%)
1. Pay minimums on your student loan debt.
2. Pay off the bar loan asap (this is a priority and an emergency).
3. Build an emergency fund (2-3+ months' living expenses).
4. Decide whether to refi or to PAYE on your student loans.

SmokeytheBear wrote:

Anonymous User wrote:

SmokeytheBear wrote:

Anonymous User wrote:$193,971 loan balance
average rate of 6.4%
Car/Consumer Debt payment ~500/month
Biglaw 180k

help please?

Does consumer debt = credit card?

It is a 4k bar loan with ~18% interest I believe.

All of this depends at least a bit on how risk averse you are and how long you plan to be in big law. But this is the general advice:

1. Make minimum payments on your loans and pay off that bar loan as aggressively as possible.

2. Start building up an emergency fund savings account. People have differences on how much they think it should be depending on how risk averse they are, but the theory ranges from three to six months of living expenses.

3. Refinance at least a portion of your loans. The best option for you since you are biglaw is with First Repbulic. You have to refinance at least $60,000 and be in one of their zones (San Francisco, Palo Alto, Los Angeles, Santa Barbara, Newport Beach, San Diego, Portland (Oregon), Boston, Palm Beach (Florida), Greenwich or New York City), as well as several other requirements. One of us can get you a referral code so you get $200 upon opening your account and we get $300. Otherwise refinance with one of the other options like SoFi or Common Bond.

Thanks! Unfortunately, I'm not in any of those areas so I don't think First Republic is an option. I could pay off the bar loan today if I wanted, just want to spend a little time saving up some $$$ for an emergency fund. Should I be refinancing right away or wait? Is $60k generally how much I want to refinance at a time, or less? Should I be refinancing the highest interest first/consolidate all my loans?

Thanks for your help!

Paying 18% interest is an emergency (that's credit card interest rates).

I generally don't agree with the refinancing a small portion at a time. I tend to think you're better off going all in on either federal or refied loans rather than trying to straddle the line.

bk1 wrote:Paying 18% interest is an emergency (that's credit card interest rates).

I generally don't agree with the refinancing a small portion at a time. I tend to think you're better off going all in on either federal or refied loans rather than trying to straddle the line.

Good plan. Paid off completely.

I see your point, but I'm confident that nobody will allow me to refi ~200k in loans, haha. TBH I haven't looked much into it, but refinancing my higher interest loans (7.2%) to a much lower interest rate would seem worth it. Why are you cautious about refinancing portions of loans?

Anonymous User wrote:

bk1 wrote:Paying 18% interest is an emergency (that's credit card interest rates).

I generally don't agree with the refinancing a small portion at a time. I tend to think you're better off going all in on either federal or refied loans rather than trying to straddle the line.

Good plan. Paid off completely.

I see your point, but I'm confident that nobody will allow me to refi ~200k in loans, haha. TBH I haven't looked much into it, but refinancing my higher interest loans (7.2%) to a much lower interest rate would seem worth it. Why are you cautious about refinancing portions of loans?

It's a personal preference. I refied about $120l with FR and left about $60k untouched, partially because some of it is around 1.7-3.2%, partially because I want the protections of government loans further partially because I dont want to go this big law thing forever.

Anonymous User wrote:

bk1 wrote:Paying 18% interest is an emergency (that's credit card interest rates).

I generally don't agree with the refinancing a small portion at a time. I tend to think you're better off going all in on either federal or refied loans rather than trying to straddle the line.

Good plan. Paid off completely.

I see your point, but I'm confident that nobody will allow me to refi ~200k in loans, haha. TBH I haven't looked much into it, but refinancing my higher interest loans (7.2%) to a much lower interest rate would seem worth it. Why are you cautious about refinancing portions of loans?

many/most of us that refinanced had ~ 200k in loans. Considering that's not even the complete COA for most law schools, these companies expect that you will have that debt level

if I were in biglaw with 200k in loans I would generally consider waiting a while (1yr or so) to be sure you can hang in there for a couple years/save up a good emergency fund. though with interest rates as low as they are, it really is a great time to refinance

JenDarby wrote:

Anonymous User wrote:

bk1 wrote:Paying 18% interest is an emergency (that's credit card interest rates).

I generally don't agree with the refinancing a small portion at a time. I tend to think you're better off going all in on either federal or refied loans rather than trying to straddle the line.

Good plan. Paid off completely.

I see your point, but I'm confident that nobody will allow me to refi ~200k in loans, haha. TBH I haven't looked much into it, but refinancing my higher interest loans (7.2%) to a much lower interest rate would seem worth it. Why are you cautious about refinancing portions of loans?

many/most of us that refinanced had ~ 200k in loans. Considering that's not even the complete COA for most law schools, these companies expect that you will have that debt level

if I were in biglaw with 200k in loans I would generally consider waiting a while (1yr or so) to be sure you can hang in there for a couple years/save up a good emergency fund. though with interest rates as low as they are, it really is a great time to refinance

Good plan! I think I might refinance a smaller amount of my larger loans to help get rid of some of that interest and go from there, trying to get the best of both worlds.

Also, good to see that this amount of loans isn't atypical. I've been feeling a bit overwhelmed with it all lately.

umichman wrote:

Anonymous User wrote:OLs, don't forget about capitalization when planning your loan obligations. I've been making payments for almost two years and here's what my balance looks like:

Original Loan Amount (Disbursed): $76,750.00
Total Amount Paid: $23,433.93
Remaining Balance: $70,983.30

How is this possible. Even at 6 percent interest rate you are looking at around growth to 85k. If you had paid 23k off that you would be sitting closer to 62k remaining. I'm not saying you are wrong or lying. I'm just interested in the math.

You're not too far off with the 85k number. I think my beginning balance when I started payments was somewhere around there, maybe a little higher. You're missing the interest that still accrues on the 85k-ish once payments start. I've probably paid somewhere around 9-10k in interest.

Danger Zone wrote:

umichman wrote:

Anonymous User wrote:OLs, don't forget about capitalization when planning your loan obligations. I've been making payments for almost two years and here's what my balance looks like:

Original Loan Amount (Disbursed): $76,750.00
Total Amount Paid: $23,433.93
Remaining Balance: $70,983.30

How is this possible. Even at 6 percent interest rate you are looking at around growth to 85k. If you had paid 23k off that you would be sitting closer to 62k remaining. I'm not saying you are wrong or lying. I'm just interested in the math.

Because he said DISBURSED. That means it collected interest during law school which then capitalized as principal, then the capitalized amount plus disbursed amount has been accruing interest since then.

If I recall when I was in LS, direct unsubsidized loans had origination fee around 1% and grad plus had origination fee around 4% (fuckin scam that was/is) so yeah this scenario seems totally plausible.

Origination fee is in addition to the interest I was talking about but yeah that's also true

Anonymous User wrote:

JenDarby wrote:

Anonymous User wrote:

bk1 wrote:Paying 18% interest is an emergency (that's credit card interest rates).

I generally don't agree with the refinancing a small portion at a time. I tend to think you're better off going all in on either federal or refied loans rather than trying to straddle the line.

Good plan. Paid off completely.

I see your point, but I'm confident that nobody will allow me to refi ~200k in loans, haha. TBH I haven't looked much into it, but refinancing my higher interest loans (7.2%) to a much lower interest rate would seem worth it. Why are you cautious about refinancing portions of loans?

many/most of us that refinanced had ~ 200k in loans. Considering that's not even the complete COA for most law schools, these companies expect that you will have that debt level

if I were in biglaw with 200k in loans I would generally consider waiting a while (1yr or so) to be sure you can hang in there for a couple years/save up a good emergency fund. though with interest rates as low as they are, it really is a great time to refinance

Good plan! I think I might refinance a smaller amount of my larger loans to help get rid of some of that interest and go from there, trying to get the best of both worlds.

Also, good to see that this amount of loans isn't atypical. I've been feeling a bit overwhelmed with it all lately.

I refinanced $300k with FRB, I think that is their maximum (and I still have some federal loans left over).

I also tend to agree with waiting a year if you are in biglaw before refinancing to be sure it is what you want to do with your life (not even just biglaw, but corporate/commercial law in general and not, say, public interest). I got more and more freaked out by the day knowing my PAYE payments weren't even covering interest and the loan was ballooning, but even 6% interest on $300k would have only added like $25k to my principal over the year. Well worth it to keep your career options open, especially when your debt is already at an astronomical level.

Anonymous User wrote:

JenDarby wrote:

Anonymous User wrote:Good plan! I think I might refinance a smaller amount of my larger loans to help get rid of some of that interest and go from there, trying to get the best of both worlds.

What you describe is not a thing. Gov't loan forgiveness is only helpful if you start out with a large balance relative to your income. Otherwise, the payment calculations are such that you pay off the balance before you benefit from the loan forgiveness.

This is an all-or-nothing thing. You either go for low interest rates or loan forgiveness. If you try to split the baby, you get neither.

kcdc1 wrote:

Anonymous User wrote:

JenDarby wrote:

Anonymous User wrote:Good plan! I think I might refinance a smaller amount of my larger loans to help get rid of some of that interest and go from there, trying to get the best of both worlds.

What you describe is not a thing. Gov't loan forgiveness is only helpful if you start out with a large balance relative to your income. Otherwise, the payment calculations are such that you pay off the balance before you benefit from the loan forgiveness.

This is an all-or-nothing thing. You either go for low interest rates or loan forgiveness. If you try to split the baby, you get neither.

Whole I generally think going 50/50 is not ideal, the value of keeping some gov loans is not necessarily the forgiveness (if you're refiing and paying those off, then presumably you won't be heading towards forgiveness anyways) but rather the risk mitigation (i.e., that you can switch to an income based plan and significantly reduce payments if you lose your job or take a pay cut).

The risk you allude to is a cash flow problem - what happens if my monthly income drops below what I am obligated to spend? This risk can be more efficiently mitigated by saving some $$ before leaving biglaw. If you have 50k cash, thats a pretty big buffer that you’d need to burn through before worrying about defaulting. I suppose that if you suffer a long period of unemployment, youll be in trouble, but isnt that true for the 50/50 plan as well?

Keeping 100k of loans at 6.5% instead of 3.5% is an expensive job-loss insurance plan, and I’m not persuaded that it’s effective.

kcdc1 wrote:The risk you allude to is a cash flow problem - what happens if my monthly income drops below what I am obligated to spend? This risk can be more efficiently mitigated by saving some $$ before leaving biglaw. If you have 50k cash, thats a pretty big buffer that you’d need to burn through before worrying about defaulting. I suppose that if you suffer a long period of unemployment, youll be in trouble, but isnt that true for the 50/50 plan as well?

Keeping 100k of loans at 6.5% instead of 3.5% is an expensive job-loss insurance plan, and I’m not persuaded that it’s effective.

But you don't necessarily know when you'll be leaving biglaw. And any buffer you may have might help bridge the gap of unemployment, but it won't necessarily bridge the gap of ending up in a significantly lower paying job.

For those of you that refinanced with FRB, can it be hit or miss based on banker?

My lending decision came back today, and they noticed that most of my liquidity was from “large non-payroll related deposits” (we got married recently) and that wouldn’t count toward my liquidity for lending purposes.

It seems like others on here have deposited large amounts in cash borrowed from parents to meet liquidity requirements- how so?

Did I just get a stricter banker?

I'm not going to give you advice on how to defraud a bank lender, but there's a pretty obvious way around that issue.

PorscheFanatic wrote:For those of you that refinanced with FRB, can it be hit or miss based on banker?

My lending decision came back today, and they noticed that most of my liquidity was from “large non-payroll related deposits” (we got married recently) and that wouldn’t count toward my liquidity for lending purposes.

It seems like others on here have deposited large amounts in cash borrowed from parents to meet liquidity requirements- how so?

Did I just get a stricter banker?

Did they give you the opportunity to explain/show where the deposits are from? I had some large/random deposits both when I initially refinanced and when I changed my terms and I just explained what they were and provided a sourcing of funds where possible.

In one instance it was actually a large sum of cash and I let them then know it was back rent from a tenant and emergency cash I usually keep in a safe and that was sufficient. "We just got married" seems like a reasonable explanation for some large cash infusions.

does this thread have opinions about commonbond?

anyriotgirl wrote:does this thread have opinions about commonbond?

I was initially refinanced with commonbond on a variable rate. No complaints, the process was easy and they initially offered me the best rate among competitors. Over the year and a half I was refinanced with commonbond the variable rate gradually rose from 4.16 to 4.68%.

With FRB's ridiculously low rates I ended up re-refinancing to drop my then 4.68 variable to a 3.75% fixed (which I since modified to 2.95% fixed with FRB).

If you're not in an FRB eligible area, I would check out earnest (I think DF could give you a referral) in addition to commonbond. Last time I checked they had slightly more competitive rates.

JenDarby wrote:

anyriotgirl wrote:does this thread have opinions about commonbond?

I was initially refinanced with commonbond on a variable rate. No complaints, the process was easy and they initially offered me the best rate among competitors. Over the year and a half I was refinanced with commonbond the variable rate gradually rose of course.

With FRB's ridiculously low rates I ended up re-refinancing to drop my then 4.6% rate to 3.75% fixed (which I since modifiers to 2.95% fixed with FRB).

they're offering me 3.3ish on a 5 yr fixed. I think I'm gonna pull the trigger this week, I just want to make sure they're not a scam or something. I don't qualify for FRB and sofi quoted me a higher rate

hey all,

now that i've found out that ive actually passed the bar, i'm going to go ahead and refi through earnest. anybody want to share a referral code (giving preference to anyone willing to split their referral bonus)

jaesonko wrote:hey all,

now that i've found out that ive actually passed the bar, i'm going to go ahead and refi through earnest. anybody want to share a referral code (giving preference to anyone willing to split their referral bonus)

wait, so you want the referree bonus and then half the referrer bonus as well?

but still,

Desert Fox wrote: