03-17-2010 07:01 AM
I'm new to posting and I need to advise. I am 25 years old, with about 125K in SL debt with an additional 40K in debt that is PLUS Parent loan that I've taken responsibility for. I pay on time every month and I have since I started making payment. I have no credit card debt, and a car loan of about 18K that I pay each month on time as well (I pay more on that one to pay it down faster and it has the highest rate).
The interest rates on my loans vary from 2.75 to 8.00 (on the PLUS loan that is fixed). I really want to pay these off faster but I'm not sure on the best way. I make 43K a year, live in NJ (which means my paychecks do not go that far), I am also currently looking for a higher paying job. All I spend my money on is basically my car note and loans. I want to pay them off faster so that I can have children sooner (getting married in 5 months). I want to have kids and but do not want to work full time while they are young.
Any advise would be helpful. Also, please no lectures on how I should have done this or that, im the first one in my family to go to college and I dont regret it. I'm meeting my obligations, but I want to pay off the debt sooner.
03-17-2010 07:30 AM
I'd max out the payments on the highest interest debt and pay the minimum on the others and keep paying down that way, which it sounds like you're already doing. Also, when you get your tax refund based on your interest paid for student loans, perhaps use that to pay down the car loan. It sounds like you have the right idea, it's just HARD. When I was in school, the rule of thumb was to take out no more in student loan debt than you expected to make in the first year with your degree, so kudos on being able to pay more than the minimum on those loans! If you find you need some respite, you might want to consider the income contingent repayment option - although that's not going to accomplish your goal of paying them off ASAP. BTW, I don't know what your current qualifications are, but there are employers (including the federal government) that will assist with student loan debt. While they will pay less initially than a private company will, they also have set promotions that will advance you possibly past an industry person in the first few years. If I remember right, the student loan benefit could be up to 8-10k / year.
03-17-2010 07:34 AM
I've also known people to take classes part time at a community college more to keep loans in deferment so that they aren't accumulating interest on the subsidized ones.
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