Student loan payments: get advice and actual numbers here Forum

[Old Gregg]

...probably should've gone for a variable rate.

[hous]

...probably should've gone for a variable rate.

Variable is 4.05%, still higher than I expected.

[JenDarby]

...probably should've gone for a variable rate.

Variable is 4.05%, still higher than I expected.

I would still jump at that variable rate with how small your debt load is. You will save money regardless if you pay your loan off in two years, and if something went wrong work wise you should atill have no issue servicing the remainder on any income.

[gk101]

...probably should've gone for a variable rate.

Variable is 4.05%, still higher than I expected.

is this for a 10 year repayment plan?

[Anonymous User]

I'm terrible with financial matters, so I'm curious to hear thoughts on this.

Debt: $145,000 (about $120k is from law school, so high graduate rates)
Income: $90,000 (could be as high as $105,000 with bonuses, which are purely hours based and seem pretty likely given my workflow)
Credit Score: 725-750 range
Other debts: Car that is nearly paid off, but I'm contemplating the getting a new car. No mortgage (currently renting)

Got offered a 15 year variable rate of 4.170, fixed rate of 6.125. I would like to do 10 year (3.795 variable) but the monthly payment just gets too expensive. Is the variable rate the way to go?

[JenDarby]

You can try DRB. They advertise lower rates but I can tell you first hand they turn people down, lol. I only have 50k in student loans, make 65k, have a 890 credit score, and own a home outright and they wanted a co-signer.

How do you have an 890 on an 850 scale? Didn't VantageScore move to an 850 max along with FICO in 2013?

[Anonymous User]

Depends on your appetite for risk. Me? I'm risk averse. I had $200K in debt between my spouse and I, so we refinanced $50K at a variable 15 year and $150K at fixed 15 year rate. The interest rate difference between 10 and 15 years was not enough in my opinion to outweigh the flexibility that the 15 year term provides (you can always prepay). My reasoning for only refinancing a small portion as variable is that I wanted an amount small enough that I could tap my cash reserves and pay down a significant portion of needed. You know interest rates will rise within the next year or so. How much and how quickly is anyone's guess. If you know the answer, your talents are wasted as a lawyer. Rather than gamble, I'd like to take the safe road for the most part because I have a family and mortgage. If you are young and single, you might be more comfortable taking on that kind of risk.

tLDR: personally, I wouldn't refinance an amount with a variable rate that exceeds what I could pay off within 1-2 years of rates sky rocket.

[hous]

You can try DRB. They advertise lower rates but I can tell you first hand they turn people down, lol. I only have 50k in student loans, make 65k, have a 890 credit score, and own a home outright and they wanted a co-signer.

How do you have an 890 on an 850 scale? Didn't VantageScore move to an 850 max along with FICO in 2013?

780~790, my bad. I still think 4.05% variable rate on either a 5 or 10 year repayment plan is a bit high for my situation. I think i'm going to get my wife to co-sign and see if I can get below 3%.

[Anonymous User]

Thought I'd share my numbers:

Debt: 157k (most loans are 7.9% and 6.8%). *Debt was originally $189k but we just refinanced our house and pulled out $32k at 3.8% interest rate. Mortgage payment stayed the same and this way we can deduct the interest.
Income: 100k ($76k gross salary + $24k net rental income)
Credit score: 770
Husband Co-signed w/ me. His income is $120k

SoFi (fixed w/ Autopay):
5 year @ 4.375%
10 year @ 5%
15 year @ 5.490%
20 year @ 5.740%

SoFi (variable w/ Autopay):
5 year @ 3.045%
10 year @ 3.045%
15 year @ 3.420%

We are going with the 10 year fixed at 5%. It is tempting to go with 4.375% but we are expecting baby #2 this summer so we need a little wiggle room. If we have any extra cash we will just prepay.

[hous]

You can try DRB. They advertise lower rates but I can tell you first hand they turn people down, lol. I only have 50k in student loans, make 65k, have a 890 credit score, and own a home outright and they wanted a co-signer.

How do you have an 890 on an 850 scale? Didn't VantageScore move to an 850 max along with FICO in 2013?

780~790, my bad. I still think 4.05% variable rate on either a 5 or 10 year repayment plan is a bit high for my situation. I think i'm going to get my wife to co-sign and see if I can get below 3%.

I went with the 3.8% variable / 10 year. I figured If I can get two years under 4% I will be golden and can pay it all off in year 3. If it goes over 4% I will borrow money from my wife and just pay it off in full.

[Anonymous User]

PI staff attorney, paying under PAYE and working toward PSLF. My salary is $65,600, and I pay around $400 a month based on my income, an amount fully covered by my school's LRAP. I borrowed the full cost of attendance and will be debt free in another 8 years if I continue PSLF eligible work.

[Anonymous User]

Thought I'd share my numbers:

Debt: 157k (most loans are 7.9% and 6.8%). *Debt was originally $189k but we just refinanced our house and pulled out $32k at 3.8% interest rate. Mortgage payment stayed the same and this way we can deduct the interest.
Income: 100k ($76k gross salary + $24k net rental income)
Credit score: 770
Husband Co-signed w/ me. His income is $120k

SoFi (fixed w/ Autopay):
5 year @ 4.375%
10 year @ 5%
15 year @ 5.490%
20 year @ 5.740%

SoFi (variable w/ Autopay):
5 year @ 3.045%
10 year @ 3.045%
15 year @ 3.420%

We are going with the 10 year fixed at 5%. It is tempting to go with 4.375% but we are expecting baby #2 this summer so we need a little wiggle room. If we have any extra cash we will just prepay.

Just wanted to update this.... These numbers were the numbers on my pre-approval letter. When I signed my loan documents today my interest rate was actually 4.615% w/ autopay discount for a 10 year fixed. VERY happy with my new rate. Good luck to everyone who is refinancing!

[totgafk180]

yes

[hous]

You can try DRB. They advertise lower rates but I can tell you first hand they turn people down, lol. I only have 50k in student loans, make 65k, have a 890 credit score, and own a home outright and they wanted a co-signer.

How do you have an 890 on an 850 scale? Didn't VantageScore move to an 850 max along with FICO in 2013?

780~790, my bad. I still think 4.05% variable rate on either a 5 or 10 year repayment plan is a bit high for my situation. I think i'm going to get my wife to co-sign and see if I can get below 3%.

I went with the 3.8% variable / 10 year. I figured If I can get two years under 4% I will be golden and can pay it all off in year 3. If it goes over 4% I will borrow money from my wife and just pay it off in full.

If anyone else is interested in refinancing, you can use my referral link. You will get $100 if you accept a loan from Sofi with my referral link below. Full disclosure, I will get $300.

https://www.sofi.com/refer/5/11233

I'm at 3.8% variable, but you have to be mindful that you give up certain benefits when you refinance federal student loans to a private servicer. You lose IBR and PLSF opportunities and its more difficult to get forbearance if you run into tough times. Refinancing made sense with me personally and I'm willing to take a risk on a variable rate to get a lower interest rate since my loans are relatively small and I have a wife to spot me incase I need to pay them off sooner. You have to decide whether its right for you before you decide to refinance.

[XxSpyKEx]

Anyone know if you can do PAYE while living overseas?

Yeah, you can. PSLF overseas works as well, if you're working in a nonprofit. (I know someone who did IBR while overseas and her payments counted towards PSLF.)

[Anonymous User]

Thought I'd share my numbers:

Debt: 157k (most loans are 7.9% and 6.8%). *Debt was originally $189k but we just refinanced our house and pulled out $32k at 3.8% interest rate. Mortgage payment stayed the same and this way we can deduct the interest.
Income: 100k ($76k gross salary + $24k net rental income)
Credit score: 770
Husband Co-signed w/ me. His income is $120k

SoFi (fixed w/ Autopay):
5 year @ 4.375%
10 year @ 5%
15 year @ 5.490%
20 year @ 5.740%

SoFi (variable w/ Autopay):
5 year @ 3.045%
10 year @ 3.045%
15 year @ 3.420%

We are going with the 10 year fixed at 5%. It is tempting to go with 4.375% but we are expecting baby #2 this summer so we need a little wiggle room. If we have any extra cash we will just prepay.

Interesting. My pre-approval rates are literally identical. Maybe we fall into the same risk bucket?

Debt: About $95,000, but I'm only refinancing $80,000 (about $15k was cheap 4% financial aid loans)
Income: $160k. I also included the anticipated $15k bonus.
Rent: 2700 (married, wife didn't want to cosign)

[bdubs]

I had a ~3.2% 10 year variable rate from SoFi and just refinanced to a ~2.65% variable rate with DRB.

The DRB loan only resets every quarter, so i figured it was worth the switch even though the interest rate difference is small.

The fixed 10 year rate they quoted me was 4.5%

[j0x0c0]

Sorry if off topic - I have a somewhat unique situation. I have approx. $140k in fed loans. I have an offer to refi from DBR for approx. 3% 10-year var. However, my parents have a HELOC for approx 2%.

Is there some reason I shouldn't use my parent's money? I should point out that they have two houses, with the newer one with an approx 4% mortgage rate. It seems obvious that I should pay off my loans using the HELOC. Worst case scenario is we can just sell the house (even at a loss), versus not ever being able to walk away from the student loans.

However, I'm not particularly financially savvy and just want to make sure I'm not missing something. I'm considering paying for a financial planner consultation, but thought I'd check with this knowledgeable source of information first. Thanks in advance!

[XxSpyKEx]

Sorry if off topic - I have a somewhat unique situation. I have approx. $140k in fed loans. I have an offer to refi from DBR for approx. 3% 10-year var. However, my parents have a HELOC for approx 2%.

Is there some reason I shouldn't use my parent's money? I should point out that they have two houses, with the newer one with an approx 4% mortgage rate. It seems obvious that I should pay off my loans using the HELOC. Worst case scenario is we can just sell the house (even at a loss), versus not ever being able to walk away from the student loans.

However, I'm not particularly financially savvy and just want to make sure I'm not missing something. I'm considering paying for a financial planner consultation, but thought I'd check with this knowledgeable source of information first. Thanks in advance!

This is basically like comparing borrowing money from your parents to repay your loans (at an extremely favorable rate that you're getting solely because they are your parents) versus refinancing your student loans with an actual lender. If you think about it, they could simply sell the house and give the $140 to repay your student loans (assuming they don't really care about the house anyways), and you could repay them at a 0% interest rate. The worst case scenario with the HELOC is that you screw your parents out of $150k from the house that they lose since you couldn't repay the mortgage that they took out to help you with your student loans. If the $150k is no big deal for them, then I don't really see the issue, but if they need that money (e.g. maybe they are planning to use that money they get from selling that house to fund part of their retirement), then you're potentially screwing them over (i.e. if you aren't able to repay them). If you're 100% sure that you're going to be able to repay that money (e.g. you're in biglaw in Dallas and are relatively certain you'll be able to repay the money before leaving biglaw), then I don't really see why not just go with the 2% on the HELOC.

[Old Gregg]

If you're 100% sure that you're going to be able to repay that money (e.g. you're in biglaw in Dallas and are relatively certain you'll be able to repay the money before leaving biglaw), then I don't really see why not just go with the 2% on the HELOC.

When is anyone ever 100% sure about this?

I'm not sure 1% better interest rate is really worth it when you risk losing a house if you can't make your payments. Also, your monthly payments wouldn't be appreciably lower (and definitely not something you couldn't adjust for with some extremely minor lifestyle changes).

[XxSpyKEx]

If you're 100% sure that you're going to be able to repay that money (e.g. you're in biglaw in Dallas and are relatively certain you'll be able to repay the money before leaving biglaw), then I don't really see why not just go with the 2% on the HELOC.

When is anyone ever 100% sure about this?

I'm not sure 1% better interest rate is really worth it when you risk losing a house if you can't make your payments. Also, your monthly payments wouldn't be appreciably lower (and definitely not something you couldn't adjust for with some extremely minor lifestyle changes).

Okay, maybe not 100% sure, but relatively certain (e.g. if you're a 1st or 2nd year associate in Dallas, where your cost of living is practically nothing and you're pulling $110-125k /year after taxes, and where it's not very likely you'll be canned in the next year or two).

Only way the 1% better interest rate makes sense is if his parents are loaded and don't give a shit about the $150k. But if that's true, there's a real question of why he needed to borrow the money for law school in the first place.

[Vertigo1980]

Edited.

[Old Gregg]

Borrowing money for a house isn't the same sort of "debt." If you lost your job, at the very least you could probably rent the place out to cover your payments. Not so with student loan debt...

[84651846190]

I could rent my JD out to someone for... wait, never mind.

[Big Shrimpin]

I could rent my JD out to someone for... wait, never mind.

i lol'd

but seriously, though