Student Loan Advice

[LittleRed212]

So I graduated college in May 2005, and after my six-month grace period, I began repaying my $14,120.20 student loan back at $96.92 a month (yes...I consolidated).

Someone at work told me that he felt like he wasn't getting anywhere while paying back his loan (because of interest), so he went to his bank, got a loan, paid off the student loan, and then started repaying the bank back.

Is this a good idea? It seems like one to me. I have my car loan through my bank and I've had success there.

It DOES seem like I'm getting nowhere with repaying back my student loan. I've been paying on it for 15 months now, and the remaining balance is still $13,365.86!

This is what I've actually PAID back: $1453.80
But this is what has actually been taken off the original balance: $ 758.34
The difference is $695.46.

I know I'm going to have an interest rate on any type of loan, but this whole paying back the lender thing really just seems like a neverending hole.

 

[WoodysGirl]

The one thing you have to understand is that interest is going to accumulate regardless...no matter where the loan is being held. And in the beginning, any payment you make, the majority is going to go towards the interest vs the principal.

And any student loan you receive, the interest rate is going to be tons better than what you could get at any bank as a regular loan.

So if you want to pay it off faster, my suggestion is stick with the student loan payment plan and just start paying more than $100/mo.

 

[theebs]

So I graduated college in May 2005, and after my six-month grace period, I began repaying my $14,120.20 student loan back at $96.92 a month (yes...I consolidated).

Someone at work told me that he felt like he wasn't getting anywhere while paying back his loan (because of interest), so he went to his bank, got a loan, paid off the student loan, and then started repaying the bank back.

Is this a good idea? It seems like one to me. I have my car loan through my bank and I've had success there.

It DOES seem like I'm getting nowhere with repaying back my student loan. I've been paying on it for 15 months now, and the remaining balance is still $13,365.86!

This is what I've actually PAID back: $1453.80
But this is what has actually been taken off the original balance: $ 758.34
The difference is $695.46.

I know I'm going to have an interest rate on any type of loan, but this whole paying back the lender thing really just seems like a neverending hole.

Have the loan ammortized and then you can see when it will be paid off, when you are done paying interest and when you are paying on the principal..

I would do it for you but I am lazy. And breaking out the financial calculator or excel gives me a headache...so

Right now in a nutshell you are just paying the interest back. I am not sure how you consolidated it, but it should have a time frame.

If you get a personal loan you will pay a higher interest but will get rid of the debt faster. like taking a 4 year personal loan to pay it off. Will be a higher payment and cost to you now, but will eliminate the debt quicker.

Its all about time.

oh and wait till you get a mortgage!!!!

If you go to a bank in two seconds they will show you the cost of the student loan vs. the cost of the personal loan.

 

[StanleySpadowski]

So I graduated college in May 2005, and after my six-month grace period, I began repaying my $14,120.20 student loan back at $96.92 a month (yes...I consolidated).

Someone at work told me that he felt like he wasn't getting anywhere while paying back his loan (because of interest), so he went to his bank, got a loan, paid off the student loan, and then started repaying the bank back.

Is this a good idea? It seems like one to me. I have my car loan through my bank and I've had success there.

It DOES seem like I'm getting nowhere with repaying back my student loan. I've been paying on it for 15 months now, and the remaining balance is still $13,365.86!

This is what I've actually PAID back: $1453.80
But this is what has actually been taken off the original balance: $ 758.34
The difference is $695.46.

I know I'm going to have an interest rate on any type of loan, but this whole paying back the lender thing really just seems like a neverending hole.

You can't refinance your way out of debt.


And paying interest is a never ending hole. Sell the car, buy a cheap beater for a year or two, dump every penny into the student loan and you should have it cleared up in no time. Then you can start saving for a nicer car and a house.

If anyone lived like they did in college, the poverty level not the party level, for two or three years after graduation saving money, they could be set for life.

 

[smarta5150]

The one thing you have to understand is that interest is going to accumulate regardless...no matter where the loan is being held. And in the beginning, any payment you make, the majority is going to go towards the interest vs the principal.

And any student loan you receive, the interest rate is going to be tons better than what you could get at any bank as a regular loan.

So if you want to pay it off faster, my suggestion is stick with the student loan payment plan and just start paying more than $100/mo.

Thats what I was gonna say.

Student loans are virtually the lowest interst rate loans you can get.

They do as a break for students knowing they are more involved in education as opposed to working and earning an income.

Stupid finanace and accounting degrees actually taught me something

 

[theebs]

Thats what I was gonna say.

Student loans are virtually the lowest interst rate loans you can get.

They do as a break for students knowing they are more involved in education as opposed to working and earning an income.

Stupid finanace and accounting degrees actually taught me something

yeah me too. I have a finance degree also...

If he has his loan ammortized he will see when and what payment stops paying interest and then the total cost of the loan vs what a personal loans interest amount total would be.

He didnt give the years for the student loan.

I paid off all my credit card debt a few years ago with a personal loan. It was a great thing for me. Three payments turned into one with a set time, unlike the credit card....you could make minimum payments for 20 years on a 5000 dollars.

A personal loan will gain you time. The time may cost you money, that is why you need to know the total amount of interest to be paid on the loan.....Paying off a higher interest rate on a personal loan in 4 years may be the same amount or less than the student cosilidated loan.

credit cards are structured to destroy human beings...The terms are ridiculous...so a personal loan was a great choice.

 

[LittleRed212]

I'm not a HE!

 

[smarta5150]

You meant she, right?

Everything else seems right on target though lol.

 

[LittleRed212]

You can't refinance your way out of debt.


And paying interest is a never ending hole. Sell the car, buy a cheap beater for a year or two, dump every penny into the student loan and you should have it cleared up in no time. Then you can start saving for a nicer car and a house.

If anyone lived like they did in college, the poverty level not the party level, for two or three years after graduation saving money, they could be set for life.

Well, it's not like I have a Benz or anything. I got a good deal on my Honda and I'm definitely not selling her. I had to get the car because the Dodge Neon died on the interstate.

 

[Yeagermeister]

I was lucky that Uncle Sam paid for my edumacation but I did have to give up almost 4 yrs of my life. It was worth it though.

 

[LittleRed212]

Well, if this helps anyone, my payment schedule looks like this:

167 months @ 96.92

It'll be paid off in 2020.

So depressing.

 

[smarta5150]

I was lucky that Uncle Sam paid for my edumacation but I did have to give up almost 4 yrs of my life. It was worth it though.

Yag, its time to fix your avatar-line-thing... unless you are still hoping for Rivera as DC? ::

 

[Yeagermeister]

Yag, its time to fix your avatar-line-thing... unless you are still hoping for Rivera as DC? ::

It stays until there is no longer a position for him.

 

[StanleySpadowski]

Well, it's not like I have a Benz or anything. I got a good deal on my Honda and I'm definitely not selling her. I had to get the car because the Dodge Neon died on the interstate.

I'm not trying to be mean so please don't take it that way but the worst financial decision that a person can make is financing a car. I take that back, carrying a balance on a credit card may be worse but you get the point.

I do hope you got it used and the balance is less than the student loan or you're worrying about the wrong thing.

 

[theebs]

I'm not trying to be mean so please don't take it that way but the worst financial decision that a person can make is financing a car. I take that back, carrying a balance on a credit card may be worse but you get the point.

I do hope you got it used and the balance is less than the student loan or you're worrying about the wrong thing.

Credit cards are much worse...

Compound interest ruins peoples lives in a 6 month period. It is the evil of all evils. Time value of money is something everyone should have to learn about!

Nothing wrong IMO with a car loan. It is a neccessity for most people.

The area I think people get into problems with is by taking 72 month notes. That is way too long. Lowering the monthly payment does not lower the total, increases it....plus the vehicle will depreciate more at 6 years.

To me there is no harm in a 4 year note on a vehicle, especially if you keep it for 10.

Credit cards on the other hand with compound interest....bad news..the car loan is at least fixed and wont fluctuate on you.

 

[theebs]

Well, if this helps anyone, my payment schedule looks like this:

167 months @ 96.92

It'll be paid off in 2020.

So depressing.

do you know the interest rate by any chance

 

[LittleRed212]

I'm not trying to be mean so please don't take it that way but the worst financial decision that a person can make is financing a car. I take that back, carrying a balance on a credit card may be worse but you get the point.

I do hope you got it used and the balance is less than the student loan or you're worrying about the wrong thing.

I know. Getting a car coming out of college was the last thing I was thinking of doing, but when I say that the Neon died, I really mean that it DIED. The repair costs to the car would've been more than what it was actually worth. It basically needed a new engine.

I got a used certified 2000 Honda, 56,000 miles on it for $13,000.

When I realized that I would pretty much have to get a car, I wanted to get a reliable one that I could have for a very long time. I only have $8000 more to go on that and I have good credit as a result of it, so I don't regret the decision.

But I do wish the Neon would've lasted longer - it was paid off.

 

[LittleRed212]

do you know the interest rate by any chance

2.875%

 

[StanleySpadowski]

Credit cards are much worse...

Compound interest ruins peoples lives in a 6 month period. It is the evil of all evils. Time value of money is something everyone should have to learn about!

Nothing wrong IMO with a car loan. It is a neccessity for most people.

The area I think people get into problems with is by taking 72 month notes. That is way too long. Lowering the monthly payment does not lower the total, increases it....plus the vehicle will depreciate more at 6 years.

To me there is no harm in a 4 year note on a vehicle, especially if you keep it for 10.

Credit cards on the other hand with compound interest....bad news..the car loan is at least fixed and wont fluctuate on you.

I disagree to a certain extent. First, it's never a neccessity for anyone to finance a vehicle. People may want to finance because they'd like more vehicle than they can afford but anyone who can't scrape a couple of hundred dollars together for an '89 Camry with 250,000 miles can't get traditional financing anyway.

Second, most credit cards start out with relatively low limits but it's nothing for someone to go $20,000+ in the hole on a car note when just starting out in life.

Lastly, if someone was willing to keep a car for ten years and hence be driving a ten year old vehicle when they are conceivably making a better living, why not just cut to the chase and get an eight year old car from the start with cash, drive it until the wheels fall off and then repeat the process?

 

[StanleySpadowski]

2.875%

At that rate, you're foolish for worrying about it. Just listen to WG and double or triple payments up.

After you've paid off the car of course.