Basic Student Loan/Finance Questions. Overwhelmed

[Cozarkian]

Here's another trick that helps reduce your overall interest payments, assuming your federal loans have lower interest rates:

1) Note the payment for your federal student loans on the default, standard 10-year payment plan.
2) Switch your federal loans to a plan with the lowest possible monthly payment (like a graduated extended plan).
3) Calculate the difference between the old standard payment and your new monthly minimum payment.
4) Set up a monthly automatic payment applying the difference to your high-interest private loans.
5) When the private loans are paid off, take the entire monthly amount you were paying on those loans and apply it as extra payments to the federal loans.

 

[TallBill]

I personally prefer starting a Roth IRA (unless you can go 401k with matching) just to make sure that saving are started. This goes against traditional financial advice though. Depends on your income/budget.

 

[s0me0nesmind1]

Given you have a high paying job why not just live cheap for a year or so and pay off that loan quickly?

RN is a high paying job? News to me....

That said, OP is too stupid to lay down on the expenses for a year to fathom lowering his bar tabs for year.

Also, Unless I am mistaken, OP has ZERO credit. He is fresh out of college. No reasonable bank is going to trust him with a lower interest rate without collateral.... In this case, OP obviously has no collateral.

But based on OP's recent replies, apparently everyone just needed to send him a link to a basic APR calculator since he is too stupid to calculate such complete algorithms on his own.




Really? Attacking a person asking for help?


That's not what OT is about




esquared
Anandtech Forum Director

 

[s0me0nesmind1]

I personally prefer starting a Roth IRA (unless you can go 401k with matching) just to make sure that saving are started. This goes against traditional financial advice though. Depends on your income/budget.

If you make < $52,000 (or rather, make less than the 15% tax bracket) - WHY IN THE FUCK would you ever fathom something as fucking stupid as contributing to a ROTH IRA? It's one thing if you are looking for any tax advantage that you can get - it's another to say it's the best option. The majority of US Taxpayers though... it is NOT in their best interest vs. a normal tax deferred IRA.

 

[pete6032]

RN is a high paying job? News to me....

That said, OP is too stupid to lay down on the expenses for a year to fathom lowering his bar tabs for year.

Also, Unless I am mistaken, OP has ZERO credit. He is fresh out of college. No reasonable bank is going to trust him with a lower interest rate without collateral.... In this case, OP obviously has no collateral.

But based on OP's recent replies, apparently everyone just needed to send him a link to a basic APR calculator since he is too stupid to calculate such complete algorithms on his own.

Why so hostile?

 

[jaha2000]

If your working full time you are making somewhere in the 50K-60K a year even fresh out of school, thats what my wife made when she graduated.
Your take home is somewhere around 35K a year on the low end, or 3K a month..
Assuming you have a 750 a month apartment, and a 500 dollar carpayment, plus cell bill and utilities, insurance, whatever, you expenses have to be less than 2K. If they are not.... your doing it wrong...
at 7.5% i would sacrifice whatever i could to get rid of that debt... Instead of a big car payment, how about a cheap car with cheap insurance, pay the savings to the loan for a few years?

When i graduated college i had a POS car and lived in a crappy place to pay off my debt..

 

[soulcougher73]

Why so hostile?

He's conservative. It's in their nature 🙂

 

[gorcorps]

That's how most student loans work. You have been accruing interest while in school and not having to pay them yet. You first years of repayment are very interest heavy and not as much principal, but after a couple years you'll be paying a lot more principle. I haven't been very focused at paying off my grad school debt, but I'm still paying more than the minimum every month.

 

[digiram]

My advice is live with mom, save up, and pay those things off. Then you can move on. Easier said than done, of course.

 

[repoman0]

RN is a high paying job? News to me....

That said, OP is too stupid to lay down on the expenses for a year to fathom lowering his bar tabs for year.

Also, Unless I am mistaken, OP has ZERO credit. He is fresh out of college. No reasonable bank is going to trust him with a lower interest rate without collateral.... In this case, OP obviously has no collateral.

But based on OP's recent replies, apparently everyone just needed to send him a link to a basic APR calculator since he is too stupid to calculate such complete algorithms on his own.

If you make < $52,000 (or rather, make less than the 15% tax bracket) - WHY IN THE FUCK would you ever fathom something as fucking stupid as contributing to a ROTH IRA? It's one thing if you are looking for any tax advantage that you can get - it's another to say it's the best option. The majority of US Taxpayers though... it is NOT in their best interest vs. a normal tax deferred IRA.

The nerd rage that was flowing through your greasy fingers at midnight thirty is extremely palpable. Aren't there about 100 better things to be doing at that time than being unnecessarily aggressive on a tech forum?

 

[zinfamous]

This is an idea, however paying off $20K in loans over the course of 12months just seems really difficult IMO. I don't believe I have a very "high paying job" esp after you look at actual take home. I mean its an idea for sure but I would have to live on quite the budget. I will for sure weigh this as an option though.

You should be doing pretty well, though, especially considering a quicker turn towards higher pay, in-demand skills and within 2 or 3 years, ability to take that anywhere you want.

If you live in a cheap enough area, just live off of pasta and rice and ketchup for another year (you already did that for 4 years, right?) and be done with the loans asap.

At this point on, you should not refer to them as loans, or as a burden. Call them cancer. Call them tumors and name them. Treat them with the same prejudice as you would any malignant son of a bitch attached to your nutsack.

 

[zinfamous]

The nerd rage that was flowing through your greasy fingers at midnight thirty is extremely palpable. Aren't there about 100 better things to be doing at that time than being unnecessarily aggressive on a tech forum?

have you seen any of that guy's other posts?

the answer is "no"

(Just look at the first dozen or so posts in the stickied tax thread. 😀)

 

[zinfamous]

If you make < $52,000 (or rather, make less than the 15% tax bracket) - WHY IN THE FUCK would you ever fathom something as fucking stupid as contributing to a ROTH IRA? It's one thing if you are looking for any tax advantage that you can get - it's another to say it's the best option. The majority of US Taxpayers though... it is NOT in their best interest vs. a normal tax deferred IRA.

I know you're an asshole, but a ROTH is pretty good at many things. For example, you can treat it as a nice savings account for near-future plans, because you have no penalty and no taxes for taking out contributions after 5 years. Say you want to put a down payment on a home about 6 or 7 years from now? Why not contribute to that Roth for those years and in 6 or 7 years, you can withdraw 2 or 3 year's worth of contributions--and this money has probably been making some happy tax-free gains all that time.

But then you would realize that....if you weren't an asshole.

 

[repoman0]

have you seen any of that guy's other posts?

the answer is "no"

(Just look at the first dozen or so posts in the stickied tax thread. 😀)

Seriously! Isn't that guy married or something? Why the F is he going around telling people they're "fucking stupid" in the middle of the night. It reminds me of my years as an aggressive douchebag teenager 😀

I know you're an asshole, but a ROTH is pretty good at many things. For example, you can treat it as a nice savings account for near-future plans, because you have no penalty and no taxes for taking out contributions after 5 years. Say you want to put a down payment on a home about 6 or 7 years from now? Why not contribute to that Roth for those years and in 6 or 7 years, you can withdraw 2 or 3 year's worth of contributions--and this money has probably been making some happy tax-free gains all that time.

But then you would realize that....if you weren't an asshole.

This is how I use mine too. I think in addition to withdrawing contributions tax free, there's some kind of thing where you can also withdraw $10k worth of returns for the purpose of buying a first house. It's a no-brainer to max out every year if you have a spare $5500 (as long as you don't mind the possibility that your investments shit the bed and then you have no house savings)

FWIW OP, I paid down about $25-30k worth of student loans in my first couple years working. It was totally doable without really sacrificing that much, but I think I would have been better off saving and investing some of that. Even if you can't get a rate of return investing that matches your student loan rate, the time horizon on your investments will be much longer so each dollar put into them will eventually be worth more than the interest you pay on the loans. I've got about $9k left, all 4% or under so it's minimum payments from here on out, I think.

 

[Mai72]

Get a bunch of credit cards, pay off your student loan and claim bankruptcy.

I'm surprised no one has done this yet.

 

[radhak]

OP, you have already received some great advice, with ballpark numbers thrown in.

I'd just add that 7.5% is rather high, so you feeling some stress on that seems logical. When I was in a similar situation a few years ago I really cut down on my 'discretionary' spending like no tomorrow, and put it towards that loan of mine (IIRC, it was @ 6.85%). Don't think minimum payment a month - think maximum; think much more than you thought possible. Watch basic TV, brown-bag your lunch.

I know, and sorta agree with, dullard's advice to also 'live a little'. But given that you have just come out of school and this is a small loan (ie, need not stretch for many years), if you wipe it off, this should not be a drag for too long, and then, you can really relax.

 

[Mai72]

OP, you have already received some great advice, with ballpark numbers thrown in.

I'd just add that 7.5% is rather high, so you feeling some stress on that seems logical. When I was in a similar situation a few years ago I really cut down on my 'discretionary' spending like no tomorrow, and put it towards that loan of mine (IIRC, it was @ 6.85%). Don't think minimum payment a month - think maximum; think much more than you thought possible. Watch basic TV, brown-bag your lunch.

I know, and sorta agree with, dullard's advice to also 'live a little'. But given that you have just come out of school and this is a small loan (ie, need not stretch for many years), if you wipe it off, this should not be a drag for too long, and then, you can really relax.

Why not increase income? He should work on 2 or more flows of income. It's a much better option.

He could go into a side hustle that generates income. Use the income to pay down his student loans. Why should he brown bag it or cut cable? IMO, that's peanuts and it's not going to amount to much. Now, don't get me wrong. I have cut out expenses that I don't need. I just think he needs to expand instead of contract. Expand income. Blow it up. He will have a greater chance to pay off his student loan much earlier.

I would research how other people have paid off their student loans thru side hustle. There are plenty of success stories out there. That's what I'd do anyway.

 

[desura]

Okay, first things first, figure out which loans are government loans.

Secondly, put those loans if you can on IBR.

Thirdly, work as hard as you can to eliminate your private loans.

 

[Wonderful Pork]

everybody else is making good points regarding payment amounts.

My suggestion is to make sure any overpayment is entirely applied to the principle of the loan.

Perhaps that should go without saying, but I've been burned in the past making additional payments and having just count towards the following months bill (i.e., the interest) - I think that was a car loan, but with these private lenders, who knows what they'll try and pull.

 

[LegendKiller]

1. This notion of paying by credit card is utterly fucking moronic.

a. Your balance flipping cards could get terminated at any time during an economic cycle, and tons of them did during the crisis.

b. You have absolutely no recourse for payments, no deferment/forbearance, extended payment terms, IBR

c. Your interest rate, if you can't flip, would jack up significantly. During the same crisis they could increase rates significantly.

d. You can't just get discharged if you go into BK after paying off your loans with a CC. Your BK filing will go in front of a judge. The CC company will fight you tooth and nail and you could face fraud charges.

2. As others have said, look at SoFI, Earnest, CommonBond, DarienRowayton Bank, Citizens, and Thrivent. All offer student loan refinancing options. They are usually based upon a "Free cashflow" analysis where they take your income, minus your expenses and come up with your free cashflow. They use this with your FICO score, time on job, type of job/field...etc to determine whether you are eligible for their program.

3. I would explore IBR, but you might not qualify. Roughy speaking, you take your income (I) - 120% (could be higher or lower depending on program) * Federal Poverty Line. You will pay 10-15% of that differential annually.

Let me know what other Qs you have.

 

[Slew Foot]

Just work a coule extra OT shifts a month and toss it to the loan principal.

 

[TallBill]

I know you're an asshole, but a ROTH is pretty good at many things. For example, you can treat it as a nice savings account for near-future plans, because you have no penalty and no taxes for taking out contributions after 5 years. Say you want to put a down payment on a home about 6 or 7 years from now? Why not contribute to that Roth for those years and in 6 or 7 years, you can withdraw 2 or 3 year's worth of contributions--and this money has probably been making some happy tax-free gains all that time.

But then you would realize that....if you weren't an asshole.

Which is exactly what I've done with mine. I've shifted enough funds into bonds over the past 6 months, along with contributions over the next 2-3 years and I plan on buying a home with 20-30% down when I either leave the Army or PCS back into the states, while still having a nice chunk in my ROTH. Should be able to get a 15 year loan and handle it just fine.

I also don't know if I'm retiring with the Army or what my future income will be, so a ROTH works just fine with my current income situation.

I have made more than $52k and plan on doing so again.