(Closed) Student Loans and paying them off…

posted 11 years ago in Money
  • poll: What would you do?

    Pay the payoff balance...goodbye Direct loans, kiss my A$$!

    Pay the payoff balance..are you insane lady?!!

    Pay most of it and leave about $5K to pay

    Pay most of it and use the other to pay off ofther bills

  • Post # 32
    Member
    4464 posts
    Honey bee
    • Wedding: June 2010

    I will chime in and say it does also depend on the interest rate and whether they are private or federal loans.  My loans are private and I accrue $400/month (!!!!) in interest.  Being that the payments are $600/month, I barely make a dent in principal every month.  Definitely worse than my credit cards or other bills.  So that has bearing on my decision to just pay them all off!

    Post # 33
    Member
    682 posts
    Busy bee
    • Wedding: September 2010

    I think this decision largely depends on what your next steps are going to be in life. However, I strongly suggest NOT cutting up your credit card(s) as having NO credit is nearly as bad as having bad credit. And, if you aren’t using your credit cards, your not demonstrating your ability to handle credit responsibly. Have plans on buying a house in the next few years? Hang on to those cards! Even if you pump one tank of gas and pay it off online before you even get your billing statement it will still show use on your credit reports and be building your credit profile.

    You need credit, just teach yourself to use credit responsibly, (if you aren’t already) and don’t become a slave to your credit cards. I use mine for EVERYTHING and pay them off approx 2x a month, sometimes more. I always pay them off before the statement cuts so the balance is low when the banks report to the credit bureaus and it doesn’t look like I am maxed out on my cards. I use them because I get great rewards. One of them gives me 3% cash back on nearly everything and if I hold off on cashing in my rewards until I have banked $200 in cash back, they give me an extra $50 bonus. So, I get a check for $250.  I would have to look up my account to see for sure how much I have made, but off the top of my head I’d say it’s around $1500 just in the 1 1/2 years I’ve had this card.

    As for the student loans, definitely pay off any credit card debt first as they are surely pegging you for higher interest rates and the banks have been ratejacking people left and right. Read your credit card notices very carefully ladies, you know those stupid inserts that come with your bill or those things that say “important information about your account” the fine print ususally has to do with an increase in rates/change in terms. 

    I personally would put some money away for a rainy day especially since you don’t seem to be too confident in your job. Then take the rest after doing the above and pay down the student loan debt. If you have multiple loans pay off as many as you can to leave you with say only one monthly payment each month and a much lower debt load. Then if circumstances allow you can continue to pay more on it each month until you pay it off much faster, or hopefully not, but if you did lose your job or something unfortunate happened you’d only have one much smaller monthly payment to keep up with and you would also still have a little cushion in savings for such an emergency.

     

    Post # 34
    Member
    202 posts
    Helper bee

    My Fiance and I hve 55K in student loans together (we both got our Master’s degrees at the state college which saves a lot of money!!) and we’ve gone back and forth on paying them off right away or paying off a lot but saving a bit for a house… I vote for the house he votes to get rid of them all together. I think as long as you knock at as much as you can (while keeping a rainy day account in case something happens!) you’re as good as gold 🙂

    Good luck!

    Post # 35
    Member
    682 posts
    Busy bee
    • Wedding: September 2010

    Just read HotChild’s response and if you have private loans that are sucking up that much interest…then I agree with her…pay more towards the loans, but still keep some in savings.

    Just use the $ to pay off whatever debt is costing you more in interest and hang on to the one that is charging the lowest interest rate and take your time paying that off.

    Post # 36
    Member
    990 posts
    Busy bee

    Where’s the “other” option?

     I would pay off my highest interest debt, first! Be it student loans, credit cards, etc.

    Look into your consolidation options … I understand it sucks to have that payment (I have almost the same amount of debt with no degree yet so no worries) every month … but it’s not so bad …

    Post # 37
    Member
    559 posts
    Busy bee
    • Wedding: September 2010

    If you’re going to be stuck paying more interest on them later, then pay them off now!

    Post # 38
    Member
    1356 posts
    Bumble bee

    I absolutely LOATHE Direct Loans so I would do anything to be rid of them forever! 🙂

    Post # 39
    Member
    1064 posts
    Bumble bee
    • Wedding: October 2009

    I would pay a chunk, than put the rest into savings. Provided no credit card debt or higher interest loans.

    Each month provided your still employed, pay over what your supposed to, to the principle to bring down the balance thereby paying less interest in long run.

    Post # 40
    Member
    1408 posts
    Bumble bee
    • Wedding: September 2010

    Frankly, i’d pay it off, then I’d put the payments I was paying every month towards the loan into a savings account. A rainy day fund or for bigs things like buying a new car, buying a home, etc. And if you have credit cards- pay them off ASAP! Okay, wait. Pay the loan. Use its payments to pay off credits cards, THEN put those payments in savings monthly! 🙂

    Post # 41
    Member
    409 posts
    Helper bee
    • Wedding: January 2010

    this is so helpful to read- i’m about to take the masters degree student debt plunge and its helpful to know what i’m getting myself into before the plunge

    Post # 42
    Member
    350 posts
    Helper bee

    Having paid off $50K in loans, I say save what you think you will need and pay off the rest.  It is SOOOOOOOO liberating!!!!!

    Post # 43
    Member
    599 posts
    Busy bee
    • Wedding: September 2009

    I’m going to sound like an idiot, but…. what is a Direct Loan??

    If you have an emergency fund fully funded to 6 months of expenses, then I would say pay off the entire amount. If you don, then fund an e-fund first, use the rest to pay the loans down.

    Like others have said, this also depends on your interest rates. If youhave nice low rates, it would be silly to throw $70k at this when you could open a Roth IRA or some other investment. If the rates are high, then yeah, pay it off!

    Post # 46
    Member
    594 posts
    Busy bee

    I’d say pay off the majority but keep some savings just in case of a rainy day.

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