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Started By
Message
Refinancing student loans from 10 to 15 yrs
Posted on 8/2/15 at 10:16 pm
Posted on 8/2/15 at 10:16 pm
We may have some significant medical expenses coming within the next 3-12 months that would last for a year or two and would put a big strain on our monthly budget should we just pay out of pocket.
Currently, our student loans are at 4.4% variable on a 10 year repayment. We have the opportunity to switch them to 15 yr fixed at 5% and would lower our monthly payment on those by about $520-$550.
My thought is to switch to the 15 yr fixed at 5% and use the difference to cover the medical expenses and if/when they're aren't medical expenses over the next 2 years put the difference towards the loan. If everything calms down or our income increases...move it back to a shorter payment plan or continue to add to principal.
Thoughts?
Currently, our student loans are at 4.4% variable on a 10 year repayment. We have the opportunity to switch them to 15 yr fixed at 5% and would lower our monthly payment on those by about $520-$550.
My thought is to switch to the 15 yr fixed at 5% and use the difference to cover the medical expenses and if/when they're aren't medical expenses over the next 2 years put the difference towards the loan. If everything calms down or our income increases...move it back to a shorter payment plan or continue to add to principal.
Thoughts?
9
Posted on 8/2/15 at 10:37 pm to Golfer
Not sure if this is already part of your calculations or not, but the hospital is probably going to let you 0% interest that debt out to two years if its that "significant" an amount. That will give you some breathing space if you haven't considered that in your numbers yet.
This post was edited on 8/2/15 at 10:39 pm
Posted on 8/2/15 at 10:42 pm to Teddy Ruxpin
Yea. I've got that factored in.
Posted on 8/3/15 at 6:23 am to Golfer
No health insurance?
Posted on 8/3/15 at 6:35 am to Golfer
What about an introductory 0% APR credit card? Then transfer remaining balance to another when intro rate is up.
Posted on 8/3/15 at 7:35 am to BlueYoda
What Blue says sounds about right.
Posted on 8/3/15 at 8:41 am to iknowmorethanyou
quote:
No health insurance?
We have it.
Posted on 8/3/15 at 9:20 am to Golfer
I hope you are a doctor if you have enough student debt that switching from 10 to 15 years would drop your payments by $500+.
Posted on 8/3/15 at 9:26 am to Golfer
After refinancing will you still be able to deduct the interest each year?
Posted on 8/3/15 at 9:46 am to rmc
Yea
Posted on 8/3/15 at 9:53 am to Golfer
Well the way I look at it is that you will extend the life of the loan 5 years with a slightly increased rate. You will still have the ability to deduct. I would do it if necessary to give myself the room and make every effort to pay it down quicker as funds were available after you get done with the HC expenses.
I've been well above the % above AGI to start deducting HC expenses for the last 2 years. I feel your pain.
I've been well above the % above AGI to start deducting HC expenses for the last 2 years. I feel your pain.
Posted on 8/3/15 at 10:02 am to Golfer
quote:
We have it.
I gotcha. Work on adding your deductible plus stop loss to your emergency savings...maybe in your HSA if applicable. I know it isn't easy, but this type of thing won't catch you off guard in the future. Good luck.
Posted on 8/3/15 at 3:40 pm to Golfer
Do either you or your wife work at a nonprofit, like a community hospital or a large university healthcare system? I know there is loan forgiveness after 10 years if that is the case (a lot of hoops to jump through but it would be worth it to consolidate/refinance to a 30 year loan and use the program--if it is even around at that point). I think they have to be government issued loans (stafford)
Posted on 8/3/15 at 4:08 pm to Ric Flair
Her degree is not eligible for those programs, despite being in the medical field.
Posted on 8/3/15 at 4:14 pm to Golfer
Honestly, your best bet is keeping the student loans as is, and doing a payment plan for medical costs. Medical debt is something that as long as you pay something every month, they won't put you into collections, and typically won't charge interest.
Typically, they are just happy that you are paying regularly and not filing bankruptcy. Maybe stockpile 5-10 grand or so, and when debt gets paid down to 10-20 grand respectively, offer that as a final paid in full payment.
Typically, they are just happy that you are paying regularly and not filing bankruptcy. Maybe stockpile 5-10 grand or so, and when debt gets paid down to 10-20 grand respectively, offer that as a final paid in full payment.
Posted on 8/3/15 at 4:20 pm to Golfer
Eligibility for public loan forgiveness is not based on degree, it's based on class of employer. No matter your job, if you work in fed, state, or local govt, or for a nonprofit org, you are eligible. So are employees of public or nonprofit hospital employees, nonprofit univs and schools, churches, etc.
Posted on 8/3/15 at 4:36 pm to hungryone
Well it doesn't matter anyways...there was only about 20k in Stafford loans and I refi'd them into a single private loan with Sofi. And she isn't employed by a not-for-profit.
This post was edited on 8/3/15 at 4:38 pm
Posted on 8/3/15 at 4:44 pm to Golfer
I'd seek out a financial counselor/adviser at the healthcare facility after the service is rendered and you receive the bill.
First negotiate them down to the lowest payment they will accept. Could be anywhere to 20-40% of your initial bill.
Then work with them on a payment plan.
First negotiate them down to the lowest payment they will accept. Could be anywhere to 20-40% of your initial bill.
Then work with them on a payment plan.
Posted on 8/31/15 at 12:41 pm to Ric Flair
I just did this.
My father referred me to a company that basically just finds federal and private programs for you and applies for them. If you get accepted into them, you can reduce your total amount paid back by around 30-40%.
The phone # 877-752-5597 is if anyone is wondering. They helped me go from 45k owed to 30k owed.
My father referred me to a company that basically just finds federal and private programs for you and applies for them. If you get accepted into them, you can reduce your total amount paid back by around 30-40%.
The phone # 877-752-5597 is if anyone is wondering. They helped me go from 45k owed to 30k owed.
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