75

(This answer is based on the article you linked in the comment, but could probably apply in general as well) What re-payment detail are people overlooking? There are not many specifics in the article, but here are some possibilities: Some interest had accrued while in school, so the amount owed after graduation was significantly more than the original "...


60

Unfortunately this is going to land in her mother's lap. Since she is a cosigner on the lease she is just as responsible as your girlfriend for paying the return value. Both of them would have to declare bankruptcy to get the debt discharged. If I were in her situation, and I could not get a loan for the remainder, I would work out a deal with my mother to ...


54

In the UK, supposing that this student debt is the government backed type debt and not private debt, then it will never be reported on your credit report and will not affect your chances of getting credit. The student loan system in the UK is massively misunderstood by the general population and this lack of understanding is used for political aims by the ...


48

For most people the answer is a strong No, you should not pay more than the minimum repayments. UK student loans are a special type of debt with two big differences to a normal loan: You are not required to make repayments while your earnings are low. Many students will never repay their loan in full, instead the government will write off the remainder of ...


47

While you have credit card balances that are accruing interest, you should not be charging anything new to the credit cards. There are a few reasons for this. When your credit card has a balance that is accruing interest, then any new charges will start accruing additional interest immediately. That means each purchase you make is costing you much more ...


45

Should I pay off my credit cards to avoid monthly payments even if it reduces half of my savings? Unless you can still live for quite a while with that half of your savings and no income, then no. Do not use the cards any more, make the minimum payments, live on a shoestring budget, and save cash like mad. Once you get back on your feet, use the cash you'...


39

No, I don’t believe this is illegal. I think you’ve already highlighted the reasons this is done: As a service to the borrower, it allows them to lower their payment if they choose. If the borrower does start making smaller payments, it means more interest charges for the lender. The minimum payment is called “minimum” for a reason. Feel free to ignore ...


39

Attend a less expensive school The biggest pitfall to avoid is attending a school at you cannot afford. If you can get a need-based scholarship to Harvard, by all means attend an expensive university, but don't go to a school that costs $30K/year if you have to go into debt for it. There are plenty of cheaper alternatives like attending a community college ...


35

As a new graduate, aside from the fact that you seem to have the extra $193/mo to pay more towards your loan, we don't know anything else. I wrote a lengthy article on this in response to a friend who had a loan, but was also pondering a home purchase in the future. Student Loans and Your First Mortgage discusses the math behind one's ability to put a ...


28

If the savings rate is the same as the loan rate, mathematically it doesn't make any difference whether you pay down the loan more and save less or vice versa. However, if the loan rate is higher than the savings rate it's better to pay it down as fast as possible. The chart below compares paying down the loan and saving equally (the gradual scenario), ...


26

If you pay extra now you will pay less in interest over the life of the loan. Unless your savings account has a higher interest rate than the loan's rate you are not saving anything. That being said, you may have a greater need for savings due to other things (e.g. you might need a emergency fund). But if you are only saving for the loan: compare the rates ...


25

Dave Ramsey, the famous personal-finance guru and radio personality, has a concept he developed after counseling thousands of families in crisis situations called the four-walls. The idea is to prioritize your money to take care of your immediate, physical needs. This would include your savings. First, you pay for food Next, you pay utilities Next, you ...


23

If there is a cosigner, then bankruptcy on the part of your girlfriend won't be helpful: the mother will simply be fully responsible. The first option here should be to talk to the dealership/lessor. It's entirely possible they will be willing to work with your girlfriend in order to avoid a default. Lenders don't want defaults, they don't want to sell ...


22

The definitive answer is: It Depends. What are your goals? First and foremost, you need to have at least 3 months expenses in cash or equivalent. (i.e. an investment that you can withdraw from quickly, and without penalty). The good news is that you don't have to come up with it instantly. Set a time frame - one year - for creating this safety net, and ...


19

With a Parent PLUS loan, by default you are on the Standard Repayment Plan, which pays off the loan in 10 years. If the payments are too difficult to make, there is another option called Income-Contingent Repayment (ICR). (Note that Parent loans are not eligible for other income-driven repayment plans, such as IBR or PAYE.) With ICR, your monthly payment ...


18

A secured credit card is the same as a regular credit card from a credit scoring perspective. The secured nature of the card is only known by the issuing bank. With that known, the rest of the question becomes a credit scoring question regarding credit cards. It is always better for you, the borrower, to pay off the card in full every month. This will ...


18

One pitfall that I have not seen mentioned, and that I unfortunately fell into myself, is Using Student Loans To Pay For Your Lifestyle When you are in school on student loans, you are poor. Live like it. Do not use student loan money to fund partying and a nicer lifestyle than you can afford.


17

Everyone has made some good points that I was going to mention but to put it in terms that might make it easier to decide. As stated by others, paying off debt and being free is always the goal and desirable. However, you must also consider the "efficiency" of what you do as well. For example, there are two common types of student loans (there are others ...


17

No. By paying off your credit cards now, you'll be losing money you won't be recouping in the foreseeable future. I imagine the second part of your question is related to being able to use the unused credit to pay for living expenses. While it is unlikely they would reduce your credit limit after payment, that's the problem with being beholden to someone ...


16

"Can" is fine, and other answered that. I'd suggest that you consider the "should." Does your employer offer a matched retirement account, typically a 401(k)? Are you depositing up to the match? Do you have any higher interest short term debt, credit cards, car loan, student loan, etc? Do you have 6 months worth of living expenses in liquid funds? One ...


15

If your loan payment schedule was set up correctly, you should have been paying $840.71 per month for 5 years and would have been finished with the loan by 2011. By paying only $700 each month, you have effectively extended the loan to a longer term than 5 years, about 6 years and 4 month. Who told you that the monthly payment was $700? the lender? or is ...


15

can I use my credit cards for the monthly expenses Sure you can. But I think you're really asking if it's wise to use the card for monthly expenses. My answer is NO, especially if you're in so much debt because of overspending. Advice from someone who paid off a lot more than $20K in CC debt: stick the CCs in the back of your metaphorical sock drawer, ...


14

Are you asking why you aren't entitled to money that someone gave you by mistake? I think the answer is obvious even if you don't like it. If you overpaid your taxes how would you feel if the Government said, "Sorry, finder's keepers. It isn't OUR mistake you can't do math." Your best course of action is to work with the agency to see if they will work out ...


14

US bank deposits over $10K only need to be reported to FinCEN (Financial Crimes Enforcement Network- a bureau of the US Department of Treasury) if the deposits are made in cash or other money instruments where the source cannot be traced (money orders, traveler checks, etc). Regular checks and wires don't need to be reported because there is a clear bank ...


13

You can find the details in the IRS instructions for the form 5405. Summary - you have to repay the credit if you move, even if it is because you were laid off. However, if you sell the house, the repayment is limited by your gains. If you sell at a loss - you don't need to repay. Also, if you die, you don't have to repay, don't know if it helps.


13

You can find information on qualifications and a payment calculator for Income Based Repayment here. Assuming all your loans are qualifying and at 6.8% interest, and your adjusted gross income is $40,000, the calculator gives an estimated payment of $285/month. That's quite a bit less than half the actual interest due. Sounds like a pretty good deal.


13

While in my heart, I respect Ben's answer, let me play devil's advocate. You don't mention the details for each card, the credit line, interest rate current balance. Say you have one card that offers 2% cash or equivalent miles. If you cycle the monthly $1200 thru this card, that's $14400 in charges, and $288 in perks you'll get back. That amount shouldn't ...


12

To get a good estimate, go here or other similar sites and see. But basically, yes, you can save yourself a whole lot of money just by paying extra every month. One note though, do make sure you are specifying that you want the money to go towards principal, not escrow or toward prepaying interest.


12

In an adjustable rate mortgage (ARM), the starting interest rate is guaranteed for a certain period. After this period, the rate can go up or down. The monthly payment on these loans is calculated as if the rate never changed over the life of the loan. However, if the rate does change, the monthly payment also changes to cover the change in interest so ...


12

How about suing the car thieves for restitution? Civil cases can stick even where criminal ones do not. This is a direct result of the car being stolen. Make them pay, literally!


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