Hey everyone I am new to the boards. I have been searching for a place that I could get some solid advice on my student loans since it seems every place I look seems to be written by the loan companies.
Anyway, my story is - I am 23, graduated college last May, have been working as an accountant for about 7 months now. I have a ridiculous amount of student loan debt and I really need to know what the best thing for me to do with it. My federal loans are already consoldidated and Im paying $120 a month for them, so Im ok there.
Private Loans are with Sallie Mae (I hate them). I have 4 loans:
1) 32,500 - 8.25%
2) 33,000 - 10.25%
3) 13,000 - 9.75%
4) 13,000 - 9.50%
My monthly payment that I am suppose to start paying is around $1000 a month. That is ridiculous and in no way shape for form can I afford to pay that amount at this point in my life. I make a measly $38000 a year and with car payment, rent, insurance (NJ is ridiculous), CC bills, etc, I am only left with around $400 or so extra to start paying these. In a year I will make approx. 48,000 a year so I can afford more. The problem is RIGHT NOW!
I tried consolidating them about 6 months ago but Sallie Mae would not approve me since my CC balance was up to $17,000 and my total loans outstanding was $136000, however, my grandmother left me $45000 which I put right to the loans to get them where they are at now. Now, Im not sure if now that the loans are below 100k and my CC is down to $12,000 balance if I would be able to consolidate.
That brings me to my main question and that is.. SHOULD I consoldiate and WHO should I consoldiate with if so. The problem I see is that Sallie Mae initially said the consolidated rate on private loans was almost 10%!!!!! As you can see one of my big loans is 8.25, the others are slightly below 10% and the other is just at it. Im assuming I would not even benefit from consolidating being the interest rates are so ridiculous right now. This is really awful what these companies like Sallie mae do to students. 10-14% interest? Comeon. The more Ive looked into them the sketchier I see they are. They basically want you to default since no matter what they will get their money. That is why I just want to pay them and get it over with and out of my life. I would just like to know the most cost effective way to do so that will allow me to continue living my life as so. Thanks everyone
-Tom C.
Full Version: Private SL Consolidation Advice Needed
QUOTE(Electric @ May 14 2007, 12:57 PM) 
My monthly payment that I am suppose to start paying is around $1000 a month. That is ridiculous...
You're accruing over $700 a month in interest on those loans. The payment amount is a bit over 1% of what you owe, which is normally the minimum payment in standard amatorization. Paying the minimum means paying at least 2x what you borrowed over the life of the loan.
That brings me to my main question and that is.. SHOULD I consoldiate and WHO should I consoldiate with if so. The problem I see is that Sallie Mae initially said the consolidated rate on private loans was almost 10%!!!!! As you can see one of my big loans is 8.25, the others are slightly below 10% and the other is just at it. Im assuming I would not even benefit from consolidating being the interest rates are so ridiculous right now.
As of right now, the prime bank rate is 8.25%. Most 23 year-olds with 100k+ in debt are not prime borrowers. Most private loans are based on prime rate + (index amount based on your FICO). The rate is usually variable. They also have fees in addition to interest. Refinancing would cost you several grand in origination fees, and would not likely reduce your interest rate.
This is really awful what these companies like Sallie mae do to students. 10-14% interest? Comeon. The more Ive looked into them the sketchier I see they are. They basically want you to default since no matter what they will get their money.
Most private loans are not insured, and even if they are TERI will only pay 90% of the original loaned amount (loss: 10% of investment plus origination & service cost). If you default they can sell it at a loss, or collect it at additional expense to them. It's more profitable to play USAF, etc and collect defaulted FELP loans:P
That is why I just want to pay them and get it over with and out of my life. I would just like to know the most cost effective way to do so that will allow me to continue living my life as so. Thanks everyone
In other words, what's the easiest way to have your cake and eat it too? Probably not going to happen, unless a family member can loan you money or you have something of value you can sell. Minimize expenses. You can't afford a car payment. (Used car, pay cash, pay less insurance) Got cable? Lose it. Got a home phone and a cell phone? Lose one. Get a 2nd job. You need to get those monkeys off your back or they will ruin your credit and eat you alive.
You're accruing over $700 a month in interest on those loans. The payment amount is a bit over 1% of what you owe, which is normally the minimum payment in standard amatorization. Paying the minimum means paying at least 2x what you borrowed over the life of the loan.
That brings me to my main question and that is.. SHOULD I consoldiate and WHO should I consoldiate with if so. The problem I see is that Sallie Mae initially said the consolidated rate on private loans was almost 10%!!!!! As you can see one of my big loans is 8.25, the others are slightly below 10% and the other is just at it. Im assuming I would not even benefit from consolidating being the interest rates are so ridiculous right now.
As of right now, the prime bank rate is 8.25%. Most 23 year-olds with 100k+ in debt are not prime borrowers. Most private loans are based on prime rate + (index amount based on your FICO). The rate is usually variable. They also have fees in addition to interest. Refinancing would cost you several grand in origination fees, and would not likely reduce your interest rate.
This is really awful what these companies like Sallie mae do to students. 10-14% interest? Comeon. The more Ive looked into them the sketchier I see they are. They basically want you to default since no matter what they will get their money.
Most private loans are not insured, and even if they are TERI will only pay 90% of the original loaned amount (loss: 10% of investment plus origination & service cost). If you default they can sell it at a loss, or collect it at additional expense to them. It's more profitable to play USAF, etc and collect defaulted FELP loans:P
That is why I just want to pay them and get it over with and out of my life. I would just like to know the most cost effective way to do so that will allow me to continue living my life as so. Thanks everyone
In other words, what's the easiest way to have your cake and eat it too? Probably not going to happen, unless a family member can loan you money or you have something of value you can sell. Minimize expenses. You can't afford a car payment. (Used car, pay cash, pay less insurance) Got cable? Lose it. Got a home phone and a cell phone? Lose one. Get a 2nd job. You need to get those monkeys off your back or they will ruin your credit and eat you alive.
QUOTE(Electric @ May 14 2007, 12:57 PM)
Hey everyone I am new to the boards. I have been searching for a place that I could get some solid advice on my student loans since it seems every place I look seems to be written by the loan companies.
Anyway, my story is - I am 23, graduated college last May, have been working as an accountant for about 7 months now. I have a ridiculous amount of student loan debt and I really need to know what the best thing for me to do with it. My federal loans are already consoldidated and Im paying $120 a month for them, so Im ok there.
Private Loans are with Sallie Mae (I hate them). I have 4 loans:
1) 32,500 - 8.25%
2) 33,000 - 10.25%
3) 13,000 - 9.75%
4) 13,000 - 9.50%
My monthly payment that I am suppose to start paying is around $1000 a month. That is ridiculous and in no way shape for form can I afford to pay that amount at this point in my life. I make a measly $38000 a year and with car payment, rent, insurance (NJ is ridiculous), CC bills, etc, I am only left with around $400 or so extra to start paying these. In a year I will make approx. 48,000 a year so I can afford more. The problem is RIGHT NOW!
I tried consolidating them about 6 months ago but Sallie Mae would not approve me since my CC balance was up to $17,000 and my total loans outstanding was $136000, however, my grandmother left me $45000 which I put right to the loans to get them where they are at now. Now, Im not sure if now that the loans are below 100k and my CC is down to $12,000 balance if I would be able to consolidate.
That brings me to my main question and that is.. SHOULD I consoldiate and WHO should I consoldiate with if so. The problem I see is that Sallie Mae initially said the consolidated rate on private loans was almost 10%!!!!! As you can see one of my big loans is 8.25, the others are slightly below 10% and the other is just at it. Im assuming I would not even benefit from consolidating being the interest rates are so ridiculous right now. This is really awful what these companies like Sallie mae do to students. 10-14% interest? Comeon. The more Ive looked into them the sketchier I see they are. They basically want you to default since no matter what they will get their money. That is why I just want to pay them and get it over with and out of my life. I would just like to know the most cost effective way to do so that will allow me to continue living my life as so. Thanks everyone
-Tom C.
Anyway, my story is - I am 23, graduated college last May, have been working as an accountant for about 7 months now. I have a ridiculous amount of student loan debt and I really need to know what the best thing for me to do with it. My federal loans are already consoldidated and Im paying $120 a month for them, so Im ok there.
Private Loans are with Sallie Mae (I hate them). I have 4 loans:
1) 32,500 - 8.25%
2) 33,000 - 10.25%
3) 13,000 - 9.75%
4) 13,000 - 9.50%
My monthly payment that I am suppose to start paying is around $1000 a month. That is ridiculous and in no way shape for form can I afford to pay that amount at this point in my life. I make a measly $38000 a year and with car payment, rent, insurance (NJ is ridiculous), CC bills, etc, I am only left with around $400 or so extra to start paying these. In a year I will make approx. 48,000 a year so I can afford more. The problem is RIGHT NOW!
I tried consolidating them about 6 months ago but Sallie Mae would not approve me since my CC balance was up to $17,000 and my total loans outstanding was $136000, however, my grandmother left me $45000 which I put right to the loans to get them where they are at now. Now, Im not sure if now that the loans are below 100k and my CC is down to $12,000 balance if I would be able to consolidate.
That brings me to my main question and that is.. SHOULD I consoldiate and WHO should I consoldiate with if so. The problem I see is that Sallie Mae initially said the consolidated rate on private loans was almost 10%!!!!! As you can see one of my big loans is 8.25, the others are slightly below 10% and the other is just at it. Im assuming I would not even benefit from consolidating being the interest rates are so ridiculous right now. This is really awful what these companies like Sallie mae do to students. 10-14% interest? Comeon. The more Ive looked into them the sketchier I see they are. They basically want you to default since no matter what they will get their money. That is why I just want to pay them and get it over with and out of my life. I would just like to know the most cost effective way to do so that will allow me to continue living my life as so. Thanks everyone
-Tom C.
Your in an interesting situation, one that I see a lot at work. There are some options, but none of them are good. First off, DO NOT use forbearance for any reason short of preventing default...it is not a good idea, and you will kick yourself for it later.
That said, your very best option is to disconnect the cable, trim costs, and pay it.
Second best, is use a program to get you through right now, Sallie Mae has a program called select step, that allows you to make interest only payments for a 2 or 4 year period, this would prevent your loan from getting bigger, and allow you a reduced monthly payment (about $700).
There is another option called extended repayment. This is only a good plan if you don't think your income situation would improve in two or four years. It \gives you new terms, and extends the life of your loan to the max term (30 years in your case). This can offer you a lower payment, but you will pay for it over a longer term, and pay more as a result.
QUOTE(Nitro @ May 19 2007, 01:59 AM)
QUOTE(Electric @ May 14 2007, 12:57 PM)
Hey everyone I am new to the boards. I have been searching for a place that I could get some solid advice on my student loans since it seems every place I look seems to be written by the loan companies.
Anyway, my story is - I am 23, graduated college last May, have been working as an accountant for about 7 months now. I have a ridiculous amount of student loan debt and I really need to know what the best thing for me to do with it. My federal loans are already consoldidated and Im paying $120 a month for them, so Im ok there.
Private Loans are with Sallie Mae (I hate them). I have 4 loans:
1) 32,500 - 8.25%
2) 33,000 - 10.25%
3) 13,000 - 9.75%
4) 13,000 - 9.50%
My monthly payment that I am suppose to start paying is around $1000 a month. That is ridiculous and in no way shape for form can I afford to pay that amount at this point in my life. I make a measly $38000 a year and with car payment, rent, insurance (NJ is ridiculous), CC bills, etc, I am only left with around $400 or so extra to start paying these. In a year I will make approx. 48,000 a year so I can afford more. The problem is RIGHT NOW!
I tried consolidating them about 6 months ago but Sallie Mae would not approve me since my CC balance was up to $17,000 and my total loans outstanding was $136000, however, my grandmother left me $45000 which I put right to the loans to get them where they are at now. Now, Im not sure if now that the loans are below 100k and my CC is down to $12,000 balance if I would be able to consolidate.
That brings me to my main question and that is.. SHOULD I consoldiate and WHO should I consoldiate with if so. The problem I see is that Sallie Mae initially said the consolidated rate on private loans was almost 10%!!!!! As you can see one of my big loans is 8.25, the others are slightly below 10% and the other is just at it. Im assuming I would not even benefit from consolidating being the interest rates are so ridiculous right now. This is really awful what these companies like Sallie mae do to students. 10-14% interest? Comeon. The more Ive looked into them the sketchier I see they are. They basically want you to default since no matter what they will get their money. That is why I just want to pay them and get it over with and out of my life. I would just like to know the most cost effective way to do so that will allow me to continue living my life as so. Thanks everyone
-Tom C.
Your in an interesting situation, one that I see a lot at work. There are some options, but none of them are good. First off, DO NOT use forbearance for any reason short of preventing default...it is not a good idea, and you will kick yourself for it later.
That said, your very best option is to disconnect the cable, trim costs, and pay it.
Second best, is use a program to get you through right now, Sallie Mae has a program called select step, that allows you to make interest only payments for a 2 or 4 year period, this would prevent your loan from getting bigger, and allow you a reduced monthly payment (about $700).
There is another option called extended repayment. This is only a good plan if you don't think your income situation would improve in two or four years. It \gives you new terms, and extends the life of your loan to the max term (30 years in your case). This can offer you a lower payment, but you will pay for it over a longer term, and pay more as a result.
Thanks. I am actually using the select step and paying around $704 per month for a year or 2 so the loan does not get bigger. I will get hefty raises in the next 2-3 years so I can start paying large payments. I cut some costs and can afford the $700 a month now. Also, my family said they will probably loan me 50-60k within the next year and I can pay them back without interest. That will help tremendously!
You are soooo fortunate to have understanding family members who are willing to help you with finances like that. My family has more than adequate resources to do that and is ZERO help with anything.
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