[LUconn]

Do any of our older posters here still have these things? I was just staring at them on the sallie mae site and I don't see it ever going away. It's sorta disheartening to think I'll be paying a monthly payment until I'm 40. Or however long, I didn't care to do the math, but it'll be a while.

[jcmanson]

Dude, tell me about it. I've been paying these things for about 6 months, and it seems the principal balance never goes down. My loans are set up for 20 years, but I'm hoping I can get it done in about 15 years.

[El Scorcho]

Given that we have other debt we're trying to tackle first, it does seem as if they're going to stick with me for some time. Definitely makes me rethink how I spent some of my time in college, but it's still worth it. I do not plan on using the entire term to pay mine off, but for now, I'm stuck with 'em. At least the wife and I got locked in at 0.035.

[Realist]

I'm so thankful that I was able to get through without them (combo of scholly's/inheritance/g-ma is a CFO), but man, it's amazing how many people still have them going into even their mid 40's from just asking around. At least the interest rate is basically zero, which is good for today's kids b/c the cost keeps roaring up at pretty much everywhere.

[LUconn]

yeah, I will take the entire time to pay it off. I just calculated and I'll be 38 While it is an annoying monkey on your back, putting in extra money to pay it off sooner is not the best financial idea. I got my rate locked in at 3.125%. I can earn 5.015% guaranteed on my emigrantdirect account so any extra money would go in there. You should always max out your 401k, Roth IRA and most other investment vehicles before paying off your student loans. The same most likely goes for your mortgage too. Unless you got hosed on your interest rate there.

Now mentally on the other hand as opposed to financially, it'd be a great feeling to just knock it out.

[ATrain]

I'm just thankful I never needed them.

[El Scorcho]

yeah, I will take the entire time to pay it off. I just calculated and I'll be 38 While it is an annoying monkey on your back, putting in extra money to pay it off sooner is not the best financial idea. I got my rate locked in at 3.125%. I can earn 5.015% guaranteed on my emigrantdirect account so any extra money would go in there. You should always max out your 401k, Roth IRA and most other investment vehicles before paying off your student loans. The same most likely goes for your mortgage too. Unless you got hosed on your interest rate there.

Now mentally on the other hand as opposed to financially, it'd be a great feeling to just knock it out.

My mortgage and student loans are definitely my lowest priorities in terms of debt repayment, because my interest rates on both are great. I actually checked after you mentioned it and it looks liked we locked in at .0325, which is even lower than I had recalled. So, yeah. I'm not worried about it. However, I'm one of those people who would desperately like to be debt free with the only exception being my mortgage. I don't like owing anyone anything. It's just the principle (no pun intended) of the matter. Thankfully, that's the direction we're heading right now and hopefully we'll be able to arrive there before too many more years have passed.

[RubberMallet]

yeah my rates are like 3 something....can't really beat it....i pay 80 bucks a month....and eventually i'll probably just pay it off in one lump sum...

i too would enjoy having only a mortgage....and i actually enjoy having one...when we first bought our house, i noticed that our checkbook had payements that were 50 to 100 bucks more than what i thought they would be (wife pays the bills, i balance) after a year of this i ask her and she says she was paying on the principal !#%#%#%WHAT! here bank! here is my money! don't worry about paying any interest on it!

[shukcb04]

i dont know if this is sound financial advice. but one of my older friends pays the bare minimum on his student loans because the interest rate is just barely above zero, but he pays well above the minimum (when he can) on his other loans with much higher interest rates. says he's going to make big payments on the student loan once he gets his other loans payed off. sounded like it made sense to me.

[mrmacphisto]

I owe over $25,000 and have been putting payments off for years.

[LUconn]

It's like the only lender where you can basically be like, "yeah, I don't think I'm gonna pay you for a while" and they seemingly don't care too much.

[olldflame]

i dont know if this is sound financial advice. but one of my older friends pays the bare minimum on his student loans because the interest rate is just barely above zero, but he pays well above the minimum (when he can) on his other loans with much higher interest rates. says he's going to make big payments on the student loan once he gets his other loans payed off. sounded like it made sense to me.

That's personal finance 101. Pay off the highest interest debts (usually credit cards) ASAP, and move progressively down the list. It only pays to deliberately pay less than you can on a debt if you are able to earn a higher rate on the money in a fixed interest safe investment such as a CD or money market. As far as mortgages are concerned, the puny interest you would make on a little extra money paid toward the principle each month will be offset manyfold when the mortgage is paid off several years early!

[LUconn]

not neccisarily, depending on your tax bracket, where else you'd be able to invest it and your mortgage interest rate.

[TDDance234]

I'm so far in debt from Liberty, it's going to take until I'm 40 to even see a dent.

[jcmanson]

I wish I was able to lock in my rate that low. Mine is like 6 something. Sucks. That's the only debt I have right now though. So, that is my priority on paying down right now.

[RubberMallet]

i dont know if this is sound financial advice. but one of my older friends pays the bare minimum on his student loans because the interest rate is just barely above zero, but he pays well above the minimum (when he can) on his other loans with much higher interest rates. says he's going to make big payments on the student loan once he gets his other loans payed off. sounded like it made sense to me.

That's personal finance 101. Pay off the highest interest debts (usually credit cards) ASAP, and move progressively down the list. It only pays to deliberately pay less than you can on a debt if you are able to earn a higher rate on the money in a fixed interest safe investment such as a CD or money market. As far as mortgages are concerned, the puny interest you would make on a little extra money paid toward the principle each month will be offset manyfold when the mortgage is paid off several years early!

my money now will be worth much more than the money i have later...paying on your principal is like lending the bank money and not getting any interest back...if anything put that money into a small fund and then after its earned 7-8% each year for 20 years, then pay off your loan if you want to pay it off before 30 years...

if you pay 100 extra on your mortgage each month for 20 years, you'll have paid 24000 over those 20 years...if i take that 100 bucks and throw it into something that will get 7-8% (fairly simple) after 20 years that 24000 becomes almost 55,000 dollars...

a person might claim more risk is involved but i disagree....putting money into your home makes it less liquid.....what if you fall on hard times...whats easier, pulling cash out of funds or trying to sell your home or taking out a line of credit?....take out a line of credit and now you've got another payment....

cash is king....remember that equity in your home carries a 0 rate of return...

[LUconn]

well, it's not exactly free. It's compounding a little less. But don't forget about the tax deduction for mortgage payors. That's something else.

[RubberMallet]

well, it's not exactly free. It's compounding a little less. But don't forget about the tax deduction for mortgage payors. That's something else.

what you are shaving off is nowhere near the % you can make off that money...i wouldn't even put it above 1%
you only deduct taxes and interest...paying more principal doesn't help you for deduction purposes...

[Realist]

well, it's not exactly free. It's compounding a little less. But don't forget about the tax deduction for mortgage payors. That's something else.

what you are shaving off is nowhere near the % you can make off that money...i wouldn't even put it above 1%
you only deduct taxes and interest...paying more principal doesn't help you for deduction purposes...

Mallet is dead on correct. Basic Time Value of money. It seems like older generations don't get it though. My dad keeps paying an extra 1000 every month so he can be done with his mortgage reallly soon. I've tried to tell him that it's worth investing but he doesn't listen.

[RubberMallet]

well, it's not exactly free. It's compounding a little less. But don't forget about the tax deduction for mortgage payors. That's something else.

what you are shaving off is nowhere near the % you can make off that money...i wouldn't even put it above 1%
you only deduct taxes and interest...paying more principal doesn't help you for deduction purposes...

Mallet is dead on correct. Basic Time Value of money. It seems like older generations don't get it though. My dad keeps paying an extra 1000 every month so he can be done with his mortgage reallly soon. I've tried to tell him that it's worth investing but he doesn't listen.

how much does his payment go down each year?....

[LUconn]

well, it's not exactly free. It's compounding a little less. But don't forget about the tax deduction for mortgage payors. That's something else.

what you are shaving off is nowhere near the % you can make off that money...i wouldn't even put it above 1%
you only deduct taxes and interest...paying more principal doesn't help you for deduction purposes...

I was agreeing with you. Just correcting that it's not completely worthless.

[Realist]

what you are shaving off is nowhere near the % you can make off that money...i wouldn't even put it above 1%
you only deduct taxes and interest...paying more principal doesn't help you for deduction purposes...

Mallet is dead on correct. Basic Time Value of money. It seems like older generations don't get it though. My dad keeps paying an extra 1000 every month so he can be done with his mortgage reallly soon. I've tried to tell him that it's worth investing but he doesn't listen.

how much does his payment go down each year?....

I have no idea, never asked, I'm sure it's not what he could get in another investment. Plus, he won't have a mortgage to write off when he's done either.

[RubberMallet]

even people that can afford to own houses outright never do....they still mortgage their house and allow it to work for them...

[SuperJon]

Okay, I'm bringing back an old thread.

Because of reasons that were out of my hands, the loans my parents said they would pay when I took them out are now stuck on me. I now have a ton more debt than I thought I would. Luckily, all of my loans are Stafford loans.

My loans got sold to three different places: My Great Lakes, Sallie Mae, and MyFedLoan.

The first thing I did was get my loans deferred for a year. I'm working an internship making $1000/mo which is under the poverty line so they did that right away.

My next step, I think, is to consolidate everything into one loan, correct? I could be completely wrong but it makes since to have one loan with one rate as opposed to three loans and three rates to be paying back.

Lastly, and this is where I'd like some advice/opinions on: debt forgiveness. I've looked into it and federal loans can be forgiven after 100 (or maybe 120) payments if you work for a non-profit organization. I work for a church, and plan to through the ten years of payment so, if the laws don't change, I should be able to get at least part of my loans forgiven after ten years. Here's the question: paying more than what's required is stupid, right? Hypothetically if the payments were $100 and I paid $200, that'd still only count for one payment, correct? If so, there's no point in paying off extra.

This is one of those, "I didn't expect to be dealing with this and probably should've paid more attention in school" moments but that's what you guys or for.

Help a fat kid out.

[jcmanson]

Dude, tell me about it. I've been paying these things for about 6 months, and it seems the principal balance never goes down. My loans are set up for 20 years, but I'm hoping I can get it done in about 15 years.

3 years later and I'm still in the same boat