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consolidate your loans and pay what you can per month. when you get extra money (gifts, tax returns, etc) throw that at the loan. once you can afford more than the minimum montly payment, send whatever you can afford. that will help cut down on the interest accrued.
I consolidated my loans right out of college. Based on your situation and how much you have to pay back, it wouldn't hurt to consolidate yours as well. If you get a higher paying job, you can start making higher payments to pay off the loans faster. You don't always have to pay the minimum amount on your loans. So though you'd be stretching them out over 30 years and paying more interest over them over the long run, you could pay off what you can when you can.
Yeah, student loan payments eat up a quarter of my income every single month and it's tough. My advice is to consolidate them now, then when you are in a better position financially, pay more than the minimums every month to avoid the hefty interest added on.
Also, I was able to call one of my loan servicers and get my payment reduced. I explained to them that I was unable to make the minimum monthly payment and could they do anything. They were able to make it lower for the next 3 years and then it will be a higher amount after that, giving me time to increase my income.
Good luck!
You may have to consolidate now to get a payment that you can live with. You could then make adjsutments to your lifestyle and budget, save up and pay off that debt as fast as possible to cut the interest paid. Even changing your payment to every 2 weeks, (adding up to the same as the monthy payment) instead of monthly will lower the time to pay off your loans by years.
So sorry to hear you are dealing with the lovely student loans. I took out $60k, the interest made it $100k and over 30yrs I will pay back well over $300k. So needless to say I looked at every option inside out. Unfortunately since of the amount of unsecured debt, no banks will work with me so I am student with Sallie Mae (aka loan shark). Private bank like some of the ones you listed will consolodate up to 30k of student loans, I looked into Chase, Wachavia, Wells Fargo, etc. and found that the will consolidate up to 30k of unsecrued debt. If you have them all under 1 account they may be easier to manage and you may be able to work with the bank in regards to income sensitive repayments. You could do gradual repayments which allow you to pay less in the beginning and have the amount increased over time. The other option would be to extend them to the 30yr plan, I think you can do that as long as you have a minimum of 25k in debt. This does not mean you need to wait 30 yrs to pay them off. But it will buy you some time until you get on your feet. Eventually you will be able to put away money to either pay them off or if you buy a home you can always get a 2nd mortgage on your home.
Mr.ND and I are looking closely at what our budgets will be when I graduate (I've got a bit over a year left) and I think we plan to try to live minimally for the next few years and pay off as much as we can. Basically, we'll be living off of one salary (and that's for everything- rent/insurance/fun $, etc) and paying on loans with the other person's income. I just couldn't justify paying an extra $10K or $20K in interest just for the convenience of living comfortably/nicely those first years out of school. I'd rather live very modestly and wipe out as much as I can, but that really is just one approach and by no means do I think it's best for everyone.
I think if I were you, I'd consolidate my loans to get the lower payments, but pay as much as you can (so over the minimum) to reduce the interest you'll end up paying over time. We're crazy, but we're planning to try to knock these things out in about 5 years. I think you and FI need to get together one night, look at projected expenses and incomes, and see how things can shake out. Good luck, I'm hating my student loans and I'm not even paying on them yet :-(
I consolidated my federal loans, but you cannot consolidate private loans (if any of those are). I would pay those off first because they usually have variable interest rates. My private (citibank) student loans were about $25,000 and were at about a 7% interest rate for awhile. It helped when interest rates when down to about 3% so I made double or triple payments.
If you cannot pay both, defer your federal loans for awhile while you pay down your private loans (I think it's 6 months at a time) and make sure you stay up on dates if you need to defer again for another 6 months. My private loans could be deferred, but only for 1 year total (of the life of the loan) so I only deferred them for 6 months when I was looking for employment.
Consolidate. I wish I could but my loan companies won't work together on it. I was in the same situation as you paying 500/month on my SL with a FT job that paid less than 1200/month. Add in insurance, car payment, rent, utilities I was in the red. I had to decrease my minimum payment which added about 3k to my overall loan. Now I have a better job and re-worked my loans so I am paying more and therefore paying less overall. It sucks but things get better. Most important thing for me was keeping afloat and unfortunately student loans don't allow you the luxury of saving all the time.
I have loans left and right. $500 a month and I am pretty clueless about consolidating. I have to figure this out too! And mine are from two different states... :/
Wow, thank you all so much for your quick responses. Reading them makes me feel a lot better. I don't feel better about my loans, my head still feels like it's going to explode, but I feel better about consolidating knowing how many of you did and were able to work through it. Even though I was aware you could pay more than the minimum for some reason it didn't click that i won't necessarily be paying them for the whole 30 years.
Now begins the headache of actually making this happen. Figuring out which company is the best to go through and filling out applications. Fun!
@2PeasinaPod: You said exactly what I was going to say! OP... that's great advice.... :)
I HIGHLY recommend living on only 1 of your incomes when it becomes possible to do so. Right now, DH and I are in the same situation as you are. We both have lower paying jobs and together pull in about 30k... not a ton. BUT, when DH joins the Navy, our income will double, counting both of our jobs.
Our plan is to live solely on his income, then put my income totally to loans and savings. So, even though our income will change drastically, our standard of living will basically stay the same since we'll be living only on DH's salary. We're estimating that I'll be able to pay off most of my loans (25k) in about a year or year and a half doing it that way.
It takes a LOT of discipline... it's hard to not have a lot of money, especially when we see a lot of our friends spending their money on nice things and we have all goodwill furniture. We can't go out as much, have to save on groceries, turn our lights off all the time, etc. But, the upside is that we're proactively working towards a better future and learning good money habits now.
Also consider meeting with a financial planner. Our bank offers a free consultation with one and we're meeting with her tomorrow. They may be able to help you maximize what you're bringing in! Good luck!!
I graduated law school with somewhere near $140,000 in student loans. I too had multiple loans, (private, government, etc etc). My payments the first few months were near $1800. after researching I consolidated the loans and got on the graduated 20 year re-payment plan. This means that my payments start lower and increase over time as my salary increases. This got my payments down to a painless $861 per month (for now). Yes in the end I'll pay more interests but I'm ok with that. This way I'm not living paycheck to paycheck and the payments don't really effect my financial goals/situation. I highly recommend you consolidate and look into a graduated option.
I also consolidated my loans right after my BS. I couldnt consolidate my private loans but any federal loans can be consolidated. I was also wondering who you are consilidating through. I did it through direct loans and they averaged out my interest rates so that it really ended up being the same thing except my payments are determined on an income bracket.
Does anyone mind sharing what sources they used? I'd love to know what company you got your consolidation loans through. I'm starting research but it seems that there are so many options it's making my head spin. Anyone recommend a certain lendor? I'm pretty clueless..
@Meowkers: That's a HUGE difference! That makes me feel a lot better, I'm definitely going to check into the graduated option.
I'm now on the other side of the student loan mess. I got a BA and Master's which I finished in December 1996. My student loans went into repayment in the fall of 1997. I had to consolidate to afford to pay them. At that time federal loans consolidated at 9%. I had 31,000 in Stafford loans and a $1000 Perkins loan. I made my last payment in October 2008 the month before I got engaged. I was 35. So it took me eleven years to pay back a 30 year consolidation. I always made extra payments even if it was $5.00 a month, also often put gift money or the occasional small bonus towards them. My salary also increased over time allowing me to pay extra. It can be done but was a lot of hard work and sacrifice. I'm glad they are gone. Good Luck. At least interest rates are favorable at the moment.
Here's a quick resource on deferring and forbearance, in addition to what posters have told you about consolidation:
http://studentaid.ed.gov/PORTALSWebApp/students/english/difficulty.jsp
I did law school loans, but it ended up being through citibank. I had an incentive that with 36 on time payments, my interest rate reduced by 1%. Awesome! I've had mucho trouble with citibank, but interest rates are great right now so I'd shop around for the lowest.
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Hey everyone.. This might be long, so bear with me please..
I'm writing this in hopes that some of you have been there, done that, and can give me some advice. Also to vent about the fact that college is so freakin expensive. Grrr. So here goes --
I graduated with my Bachelor's degree in September, and I have quite a few loans with different companies (Chase, Discover, Fedloans, etc). My grace period has ended and I'll be getting my bills in at the end of the month. I'm not sure exactly how much debt I have, I know it's somewhere in the $30,000 range.
Discover called me yesterday to confirm some information, and told me that my payment would be $120/mo, for 15 years. That doesn't seem too bad, except that's only ONE LOAN. I have at least 2 more that are equal in value to this one, and then a bunch of smaller ones. That's the only one I've gotten a definite payment from, but If I had to estimate I'm probably looking at about $500 per month total.
I got a full time job right out of school, but the pay is extremely bad. FI has a full time job as well, but he only makes a couple dollars more per hour than I do. Right now we're still each living with our parents, so we have no rent or utility bills and are saving all we have for the wedding. We're looking to move out towards the end of the year.
If I keep the payments as is, there is no way we will be able to afford to move out of our parents houses. I've calculated my monthly bills, and between my car payment, insurance and an estimated $500 per month for loans, I'm only left with about $500 for living expenses. We live in the Northeast, so it's a pretty high cost of living out here.
If I consolidate these loans into one payment and stretch from 15 year loans to 30 year loans, I can probably cut my payments down quite a bit. The downside of that is it doubles the amount of interest I'm paying on the loan, so in the end I'd end up paying way more.
So I guess my question is -- Has anyone ever been in a similar situation? What did you do? I think the obvious answer is to consolidate and get my payments as low as possible. I'd love to hear your opinions.
Thanks for reading!