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Student Loan Repayment
Posted on 10/30/17 at 12:44 pm
Posted on 10/30/17 at 12:44 pm
Looking for some advice. I have about $62,000 in student loans that I have to repay. That cost is spread across about 15 loans (I have 2 degrees - the first one that I'm not using, and graduated this past May with a degree that I'm using to work). I'm wanting to pay them off in 5-7 years. My question is: Since I have so many, should I see about reconsolidating? What about applying for a loan to pay them off, and then just paying on that one loan to keep from having to micro-manage each one? Should I focus on paying off my current interest first?
Economics/Accounting etc is not my strong suit. I'm willing to do whatever will make the most sense for me in the long-run (not partial to any strategy in particular). Just looking for some advice!
Economics/Accounting etc is not my strong suit. I'm willing to do whatever will make the most sense for me in the long-run (not partial to any strategy in particular). Just looking for some advice!
5
Posted on 10/30/17 at 12:49 pm to agreenway6
Call the one you have the most outstanding debt with and tell them what you have and that you would like to consolidate. You should definitely look at your current APR and what they are offering to see if it makes financial sense.
ETA: do not get a personal loan to pay them off for at least two reasons: you will lose the ability to deduct the interest on your tax return and more than likely the interest will be much higher, unless you are you using some kind of collateral.
ETA: do not get a personal loan to pay them off for at least two reasons: you will lose the ability to deduct the interest on your tax return and more than likely the interest will be much higher, unless you are you using some kind of collateral.
This post was edited on 10/30/17 at 12:53 pm
Posted on 10/30/17 at 12:57 pm to agreenway6
I had all of mine through Sallie Mae and when I was paying them off (I had like 6 or 7 separate ones) I would log into the Sallie Mae website and pay the minimum payment, then take everything extra that I wanted and pay it directly towards one loan on the website because you could specifically choose how to allocate the money when doing an online payment. Really helped me get some of them knocked out instead of it just being spread out equally.
Posted on 10/30/17 at 2:18 pm to agreenway6
Basic strategy:
Pay minimum on all of them, take any extra cash and pay the higher rate ones down first. Repeat til done.
Very doubtful you can pay off with one loan and get a better rate.
Pay minimum on all of them, take any extra cash and pay the higher rate ones down first. Repeat til done.
Very doubtful you can pay off with one loan and get a better rate.
Posted on 10/30/17 at 2:58 pm to agreenway6
You could look into consolidating them all into one, potentially at a lower rate with PenFed or SOFI. However, once you move from federal loans to private, you lose a lot of potential for Federal program subsidies. If you don't think you'll ever qualify for those anyway, it's probably worth it to move them all into one, but do the math to find out for sure.
Posted on 10/30/17 at 5:25 pm to seawolf06
quote:
You could look into consolidating them all into one, potentially at a lower rate with PenFed or SOFI. However, once you move from federal loans to private, you lose a lot of potential for Federal program subsidies. If you don't think you'll ever qualify for those anyway, it's probably worth it to move them all into one, but do the math to find out for sure.
I don't think I'll ever qualify for them. My interest rates are spread pretty evenly between 3.4% and 6.8%. I like the idea of consolidating because it will be less to manage and can set it up for autopay. But obviously if it would delay my payoff time, I'll sacrifice the convenience factor lol
Posted on 10/30/17 at 7:58 pm to agreenway6
if sallie mae loans, apply for a UPromoise credit card. go online to upromise and set up account.
I was able to knock off over $2k from "cash" back using my credit card for purchases i was making anyway over a 3.5 year period
*** DISCLAIMER *** if you cant handle a credit card to be paid off every month, DO NOT use this option
I was able to knock off over $2k from "cash" back using my credit card for purchases i was making anyway over a 3.5 year period
*** DISCLAIMER *** if you cant handle a credit card to be paid off every month, DO NOT use this option
Posted on 10/31/17 at 12:19 pm to tigeraddict
quote:
if sallie mae loans, apply for a UPromoise credit card. go online to upromise and set up account.
I was able to knock off over $2k from "cash" back using my credit card for purchases i was making anyway over a 3.5 year period
*** DISCLAIMER *** if you cant handle a credit card to be paid off every month, DO NOT use this option
They're all through FedLoan. Will I not be able to do that since they aren't Sallie Mae?
Posted on 10/31/17 at 1:05 pm to agreenway6
I was able to refinance several loans into a 5 year loan with SOFI and then later PenFed. I believe the rate I received was slightly lower than my effective rate of all loans.
You could consolidate into a 10 year plan and then pay extra each month as an alternative option.
You could consolidate into a 10 year plan and then pay extra each month as an alternative option.
This post was edited on 10/31/17 at 1:06 pm
Posted on 11/1/17 at 2:29 pm to agreenway6
Posted on 11/1/17 at 5:09 pm to agreenway6
quote:
My interest rates are spread pretty evenly between 3.4% and 6.8%. I like the idea of consolidating
you're going to be hard pressed to come out better financially by consolidating. i refi'd with sofi a few years ago with drastic savings. however, i had the "grandfather" rates that were 6.8% minimum (up to 14%). sofi got me in around 4 or 4.5% iirc. for you, i'd consider doing what the others said and pay off higher balances first. as you pay a couple off, they will decrease faster and faster as you pay more on each. one possibility to ease the time commitment is to set up automatic minimum payments for them all and pay whatever you have left manually on the higher one each month.
Posted on 11/2/17 at 8:42 am to lsujro
My friend is an accountant and set me up a payment plan (how much to pay each month based on my budget) which includes how much extra to pay each month. Should I try to pay off all of my interest first? Or go forward with the plan she set up for me? I just know that the principal won't be touched until the interest is paid off on each
Posted on 11/2/17 at 8:56 am to agreenway6
quote:
Should I try to pay off all of my interest first? Or go forward with the plan she set up for me? I just know that the principal won't be touched until the interest is paid off on each
What do you mean? Interest on student loans is not pre-paid, so you can never really pay off all the interest until you have a 0 balance.
If you are asking whether to pay a bunch on one loan and minimums on the others, the answer is that it doesn't really matter. The math works pretty much the same in the long run. To pay the least $ possible, put all your extra on the highest interest loan first. If you need to keep yourself motivate, put all your extra on the lowest balance.
Posted on 11/2/17 at 10:17 am to ATLdawg25
quote:
What do you mean? Interest on student loans is not pre-paid, so you can never really pay off all the interest until you have a 0 balance.
Basically while I was in school I didn't pay on any of my loans so I have a crap-ton of accumulated interest. What I meant was should I pay those high already accumulated interest amounts first (with my extra money) to get them down to just what I accumulate monthly?
Posted on 11/2/17 at 2:26 pm to agreenway6
That's not typically how student loan interest works.
You don't have a pile of accrued interest from prior periods that needs to get paid off. Instead, each month you will have interest that accrues on your total balance. Your goal is to pay at least that interest amount so that the balance does not continue to grow. If you don't, the outstanding interest will be added to the principal, and the next month you will be charged interest on the interest that you fail to pay.
You have your minimum payment required by the lender, and you have a monthly interest accrual. You should be paying the higher of the two to avoid a growing debt balance.
You don't have a pile of accrued interest from prior periods that needs to get paid off. Instead, each month you will have interest that accrues on your total balance. Your goal is to pay at least that interest amount so that the balance does not continue to grow. If you don't, the outstanding interest will be added to the principal, and the next month you will be charged interest on the interest that you fail to pay.
You have your minimum payment required by the lender, and you have a monthly interest accrual. You should be paying the higher of the two to avoid a growing debt balance.
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