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meatsuit
its whats for dinner

Registered: 08/15/09
Posts: 155
Last seen: 6 years, 2 months
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another student loan question, BUT with a twist...
#11035454 - 09/10/09 05:09 PM (14 years, 5 months ago) |
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without getting too lengthy here, I have about 25,000 in loans, that are accruing 100 in interest every month. My dad wants to pay my loans for me, but wants the payments to be like 200-250, whereas my actual loans will probably be more like 300-350 for 10 years...
Him wanting to pay my loans is GREAT, he is on disability and social security and can afford it just fine... I just HATE the idea of fuckin sallie mae making tons off interest. I imagine those loans will end up being nearly 40,000 total paid.
I have almost enough to cover my balance in savings.... I live with my fiance and now own our home with a mortgage and bills that we easily pay even with out current part-time jobs (she is finishing school with a VERY promising career choice to find work, and I just finished..).
Point is, I have recently considered paying off my loans in full with my savings... then have my dad pay me the 250 he would rather pay, saving him 50-100 a month, and just have him pay me for 9 or 10 years to repay my savings... WIN WIN, save him money monthly and over the 10 year span, and any interest earned would be to me... and not the creditors.
My dad is steady with his income, he is 59 and is on full veteran disability and SS, together giving him a very nice income....
It boils down to the fact that my savings ain't doing SHIT at these low rates, and I am not gonna lock it up for 5 yrs for 3%... so this idea would bring me a better return, and steady, and I am confident I can earn other savings along the way, so eventually I won't have that feeling of "I HAVE NO SAVINGS".
I see potentially saving my dad like $12,000 in 10 years... and maybe me making a return of a few thousand next 10 years.
Edited by meatsuit (09/10/09 05:30 PM)
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badchad
Mad Scientist

Registered: 03/02/05
Posts: 13,374
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Re: another student loan question, BUT with a twist... [Re: meatsuit]
#11039364 - 09/11/09 09:18 AM (14 years, 5 months ago) |
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Obviously, paying off the loans in a lump sum avoids interest and is much cheaper.
Personally, I keep at least 6 months (closer to a year) living expenses on hand as a precaution (or perhaps paranoia).
I would wait until you have a secure, steady income (e.g. a job) on hand before paying out any large lump sum. Then I'd probably pay it off over a year or two.
-------------------- ...the whole experience is (and is as) a profound piece of knowledge. It is an indellible experience; it is forever known. I have known myself in a way I doubt I would have ever occurred except as it did. Smith, P. Bull. Menninger Clinic (1959) 23:20-27; p. 27. ...most subjects find the experience valuable, some find it frightening, and many say that is it uniquely lovely. Osmond, H. Annals, NY Acad Science (1957) 66:418-434; p.436
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AceOfShrooms
Time Traveler



Registered: 09/11/09
Posts: 85
Last seen: 14 years, 3 months
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Re: another student loan question, BUT with a twist... [Re: badchad]
#11048666 - 09/12/09 09:01 PM (14 years, 5 months ago) |
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So... your saving get 3% and your debt costs 5% ??? To me it would make sense to pay off the debt.
-------------------- "Believe nothing, no matter where you read it, or who said it, no matter if I have said it, unless it agrees with your own reason and your own common sense." -Buddha
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Doc_T
Random Dude




Registered: 03/06/09
Posts: 42,395
Loc: Colorado
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Re: another student loan question, BUT with a twist... [Re: AceOfShrooms]
#11048674 - 09/12/09 09:04 PM (14 years, 5 months ago) |
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Put your dad's money in the bank, share with him later. Win/win/win.
-------------------- You make it all possible. Doesn't it feel good?
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meatsuit
its whats for dinner

Registered: 08/15/09
Posts: 155
Last seen: 6 years, 2 months
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Re: another student loan question, BUT with a twist... [Re: Doc_T]
#11048927 - 09/12/09 10:09 PM (14 years, 5 months ago) |
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Quote:
AceOfShrooms said: So... your saving get 3% and your debt costs 5% ??? To me it would make sense to pay off the debt.
Yes, but not even 3% right now, I'd have to lock it up - I was getting 5% last summer with Wamu, but now with chase I make half a fucking percet... But yes, mathematically it is better to go with this, and thats why I've been considering it. Might end up doing a combination of both mentioned ideas.
Plus, now that I look my loans are between 6.8 and 7.375 percent, with some aging back to 1.88% variable. Seems I caught it right when they made those changes, and there are no good consolidation deals going on right now like there were it seems 7-10 yrs ago. My older brother had much better loans and better options.
Quote:
Doc_T said: Put your dad's money in the bank, share with him later. Win/win/win.
Not exactly sure what you mean lol ,but sounds like a good plan!
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Smackshadow
It's Time for Wild Speculation


Registered: 09/27/05
Posts: 575
Last seen: 1 month, 21 days
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Re: another student loan question, BUT with a twist... [Re: meatsuit]
#11164228 - 10/01/09 02:29 PM (14 years, 5 months ago) |
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Hey if your dad is willing to do it that's great. But you should know that if he decides not to go through with the payments at some point after you pay off your loans then you might get screwed. Gifts are not generally enforceable as contracts.
What might be better to do is pay off the portion of your debt that would lower the monthly payments down to $200 a month, and then have your dad pay those. That way you still have some savings, you dad is actually paying off your student loans, and if for some reason you dad cannot afford to make payments in the future then the worst thing which will happen is that you will be in the same boat as you are now.
Just my 2 cents.
-------------------- The trouble with fighting for human freedom is that one spends most of one's time defending scoundrels. For it is against scoundrels that oppressive laws are first aimed, and oppression must be stopped at the beginning if it is to be stopped at all. ~H. L. Mencken~
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meatsuit
its whats for dinner


Registered: 08/15/09
Posts: 155
Last seen: 6 years, 2 months
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Re: another student loan question, BUT with a twist... [Re: Smackshadow]
#11165609 - 10/01/09 06:48 PM (14 years, 4 months ago) |
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yeah, that is kind of where I am going with it. I definitely feel fortunate to even have this situation, and to be getting help to pay down these loans. Consolidation options suck right now, and i will get better rates just leaving them alone and focusing on the higher interest loans first.
peace
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