Home     Forum     401k     401k Rollovers
    Register   Login   Members   Search   FAQs     Recent Posts    




Student Loan Advice

Reply to topic
Money Talk > Personal Finance

Author Thread
mtm5062
New Member


Cash: $ 0.65

Posts: 3
Joined: 12 Dec 2014
Location: United States
Student Loan Advice  Reply with quote  

Hello,

I am looking for advice in paying back my student loans. I was wondering if it would be beneficial to consolidate my loans. I have 2 loans in my name totaling $18,314. I also have 1 Parent Plus loan in my mothers name totaling $36,000. The total I owe is around $54,000 and I currently pay $79 + $206 + $328 which is $613 a month. That is pretty steep for me to pay but I don't want to add on anymore time and want these paid off as soon as possible. Is there any way I can consolidate all 3 loans, move them into my name, and receive a lower interest rate? I reached out to numerous other agencies but they all appear to be scams. I feel my interest rates are pretty high and would like them lowered. I also never missed a payment but it is becoming hard to handle with a mortgage and car payment. Please give me any advice you may have to help me pay these loans down without getting hit with high interest rates and super long terms.

Also, I just started a job with the government on 12/23/2013 that does offer the Student Loan Forgiveness after 120 payments (so 9 years from now).

All this stuff is pretty confusing to me and I just don't want to fall victim to a scam.

Thanks,
Matt
Post Fri Dec 12, 2014 4:45 pm
 View user's profile Send private message
oldguy
Senior Member


Cash: $ 748.05

Posts: 3637
Joined: 21 May 2006
Location: arizona
 Reply with quote  

quote:
but I don't want to add on anymore time and want these paid off as soon as possible.


That may not be a good goal. Eg, if you borrowed $55k for 30 yrs at 5% the payment would be under $300/m. And if you took the extra $313/m (left from the $613) and invested it at 11%/yr for 30 yrs you'd have about $800,000. My point is - don't be too quick to repay those loans if there is a higher and better use for that income.

You mentioned a mortgage - is there equity in the house? There may be a time in the not-so-distant future when you'll be able to refi the house, add $50,000 to the mortgage, and end up with the entire SL financed for 30 yrs and 4%. And then direct your extra income stream to investing at 11%/yr - inside your retirement fund, or in a deferred taxable brokerage fund.
Post Fri Dec 12, 2014 5:19 pm
 View user's profile Send private message
mtm5062
New Member


Cash: $ 0.65

Posts: 3
Joined: 12 Dec 2014
Location: United States
 Reply with quote  

I guess I didn't think of it like that. Thanks for your reply. I just cant wait until they are all paid off, it will be a huge weight lifted off my shoulders.

I am a first time home buyer so there is not much equity plus my interest rate on my house is only 3.25% which I am pretty happy about.

I just figured maybe I could refinance the student loans with another company and lock in at a lower interest rate than 7.75% or 6.05% but it looks like Great Lakes might have me by the balls.
Post Fri Dec 12, 2014 6:40 pm
 View user's profile Send private message
oldguy
Senior Member


Cash: $ 748.05

Posts: 3637
Joined: 21 May 2006
Location: arizona
 Reply with quote  

quote:
I just cant wait until they are all paid off, it will be a huge weight lifted off my shoulders.


Maybe - but do the math, don't let emotion cloud your decisions. In the 1970s & 80s, I was buying our home plus pyramiding it to make DPs on rental houses. After a few years I got the rentals established, the rent was making the payments on 4 houses, etc. So then we blindly dumped all of our extra income into paying off houses (debt is bad, right??). Fortunately, math is how I make a living - I kept good track of costs. And I quickly realized that the 2 paid-for rentals had a much lower Return on Equity than the mortgaged houses. That's when I learned about debt as a management tool - I put new mortgages on the paid-for houses and periodically refi'd the houses from then on - still do.


quote:
and lock in at a lower interest rate than 7.75% or 6.05%



Again, I would wait a couple yrs, refi the house, clear all/most of the 7.75% note. Then wait a few years and repeat. That 3.25% is OK, but I'd rather have a 30 yr Fixed Rate 4.25% that included the $55,000. THAT would be locking in a good fixed rate - a loan that you'd be glad to own when new loans are at 12% some time in the next 30 yrs.
BTW, US home loans provide some of the cheapest capital in the world - all other nations require 'resets', usually at 10 yrs. But in the US, Joe Blow can wander into a bank, ask for $200,000, demand a 30 year fixed rate guarantee, ask for about 4%, and walk away with the money. Very Happy
Post Fri Dec 12, 2014 9:10 pm
 View user's profile Send private message
mtm5062
New Member


Cash: $ 0.65

Posts: 3
Joined: 12 Dec 2014
Location: United States
 Reply with quote  

I just consolidated the 2 loans in my name which is going to save me around $145 a month and about $4,000 once it is forgiven in 9 years. But, I still have a Direct Unsub Consolidation Loan that is in my mothers name for $36,000 total. I am paying $328 a month on that which is steep.

I am wondering if there is any way I can move that loan into my name and qualify for Loan Forgivness with a Direct Unsub Consolidation Loan? If so, I would want to stretch it out so that my payments are the lowest they can be. Correct?
Post Wed Dec 17, 2014 2:51 pm
 View user's profile Send private message
oldguy
Senior Member


Cash: $ 748.05

Posts: 3637
Joined: 21 May 2006
Location: arizona
 Reply with quote  

quote:
that does offer the Student Loan Forgiveness after 120 payments


But don't miss the big picture - I've heard of people who take low-income jobs so that they qualify for loan forgiveness. When they would be ahead to earn an extra $10k/year and use that $100k (10 yrs) to pay for their SLs themselves.

But, in any case, stretch the loans as long as possible and direct any income that you would have used to prepay loans into 11%.yr investing.
Post Wed Dec 17, 2014 3:04 pm
 View user's profile Send private message

Reply to topic
Forum Jump:
Jump to:  
  Display posts from previous:      





Money Talk © 2003-2018