Repayment plan help

[Jerry_B]

I have two sets of loans, first group from AES worth $12,200 with 6.55% int. rate where I pay an additional $150 toward principal; monthly payment: $147.71. Second group from Navient $14,400 with with 3.25% int rate; Monthly payment: $147.37 Both plans are on standard payment plan with equal payments for the next 10 years. Would it be beneficial to adjust my payment plan from Navient to a graduated repayment plan where they increase every 2 years and use the difference and apply it toward my AES student loans.  It would be roughly an extra $64 a month that I would add to my AES loans.  

I plan on paying my loans off as soon as possible, I have 3 years left on my auto loan which is roughly $305 and once that ends I'll apply that toward my loans to have everything hopefully paid off within 5 years.

Should I adjust my navient payment plan and use proceeds to pay of Aes loans with 6.55 int rate?

[SCF]

Personally, I wouldn't.  The savings on interest would be mariginal, and eventually your payments will increase to be higher than your standard repayment amount.  Basically, your first two years of graduated repayment would be interest-only payments, with nothing going toward the principal of your loans.

What is the interest rate on your auto loan?  It might make sense to pay it off first and then use the extra cashflow to focus on your student loans.  Remember that you can always delay your student loan payments if you lose your job or experience an accident or illness, but that isn't the case with the auto loan.

[Jerry_B]

My auto loan is at 2.81%, hence why my old student loans are my top priority.

[Anonymous]

I def agree with the other poster. Even though the interest rate on the student loans is higher, there is also more flexibility if something happens. Paying the auto loan sooner gets you out of a monthly payment and interest rate completely earlier than 3 years. Your student loans are going to take you a good while longer to pay off even with the extra payment. I would almost say pay of the car and then take the cash you're saving to apply toward the student loans. You're saving everywhere if you do that.

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@Jerry_B wrote:

My auto loan is at 2.81%, hence why my old student loans are my top priority.

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[ddemari]

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@Jerry_B wrote:

I have two sets of loans, first group from AES worth $12,200 with 6.55% int. rate where I pay an additional $150 toward principal; monthly payment: $147.71. Second group from Navient $14,400 with with 3.25% int rate; Monthly payment: $147.37 Both plans are on standard payment plan with equal payments for the next 10 years. Would it be beneficial to adjust my payment plan from Navient to a graduated repayment plan where they increase every 2 years and use the difference and apply it toward my AES student loans.  It would be roughly an extra $64 a month that I would add to my AES loans.  

I plan on paying my loans off as soon as possible, I have 3 years left on my auto loan which is roughly $305 and once that ends I'll apply that toward my loans to have everything hopefully paid off within 5 years.

Should I adjust my navient payment plan and use proceeds to pay of Aes loans with 6.55 int rate?

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I wouldn't change this plan. I dabbled around with different payment plans at first with Navient. I am in standard repayment plan now and I almost went for graduated even through it would have added on another 10 years in payments. So I thought about it and no, not worth the extra time and interest paid. I would think with a decent income, those payments are very manageable every month. You could even save yourself some nterest if you just threw an extra 100 dollars onto the loan every month or when you could. 

[Anonymous]

I went through a company, Student Debt Assist

They helped me out tremendously . been on a student loan forgiveness program 3 years now. 7 more and whatever is remaining on my loans will be forgiven .

310-622-9208

[New_Beginning]

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@Anonymous wrote:

I went through a company, Student Debt Assist

They helped me out tremendously . been on a student loan forgiveness program 3 years now. 7 more and whatever is remaining on my loans will be forgiven .

310-622-9208

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Are the rates reasonable? I ask because the IBR that FedLoan Servicing offered can not be based on my income. They want more than my mortgage.....thanks!

[SCF]

IBR is absolutely based on your income, and it is a standard formula that is used for all federal loan borrowers.  You can use the Repayment Estimator from the DoE to see what your payments will be on different plans.

Are you sure that FedLoan was quoting you an IBR payment, and not an extended or graduated repayment plan? With a large loan balance, both of those could still be rather high.  If they were offering you IBR, and it doesn't line up with the Repayment Estimator, there's been a mistake somewhere.  So it would be worth making sure that they have an accurate account of your income and family size.

There is no reason to pay anyone to apply for payment plans or forgiveness on your federal loans.  All of those options are open to any borrower, and you can apply for them for free, regardless of who services your loan.

[New_Beginning]

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@SCF wrote:

IBR is absolutely based on your income, and it is a standard formula that is used for all federal loan borrowers.  You can use the Repayment Estimator from the DoE to see what your payments will be on different plans.

Are you sure that FedLoan was quoting you an IBR payment, and not an extended or graduated repayment plan? With a large loan balance, both of those could still be rather high.  If they were offering you IBR, and it doesn't line up with the Repayment Estimator, there's been a mistake somewhere.  So it would be worth making sure that they have an accurate account of your income and family size.

There is no reason to pay anyone to apply for payment plans or forgiveness on your federal loans.  All of those options are open to any borrower, and you can apply for them for free, regardless of who services your loan.

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Thanks for your response