Question

Paying off student loans.  I have federal loans and 4 small private loans for an unfortunate total of 90k.Paying off student loans. I have federal loans and 4 small private loans for an unfortunate total of 90k. I will be graduating in 8 weeks and start working full time shortly after. My fiance's income has supported us comfortably while I finished school so I want to knock the loans out as quickly as possible so that we can start living the way we have always wanted to with a dual income household. I want to focus on paying off the private loans first because they seem to give people the most trouble and have higher interest rates. L My questions. 1. Should I refinance them to have them combined into 1 loan. 2. If not refinanced, would you focus on making larger principle payments, or save the total amount of the loan while making the min+interest and then pay it off all at once. Then move onto the next one like the snowball method. My goal is to have my student loans paid off in less than 3 years, once the private loans are taken care of, throw that money at the federal loans. I will be getting a sign on bonus with my first pay and I'd like to use that entirely to pay off one of the loans as well. Any other suggestions on how to tackle such a large amount of student debt?  

Answer 1

Don’t touch your federal loans unless the interest rate is sky high. Federal loans offer lots of payment plans. Speaking of payment plans, apply for the RePay plan, it’s income driven so the payment will change as you gain or lose income. If you can get a good refinance, do it. I wasn’t able to because I technically don’t make a lot on my own and would have to have my husband co-sign for them to look at his income. Even though he is helping me, I don’t want his name associated with my loans. I recently paid off all of my private loans (thanks to my husband supporting me and us being able to put my ENTIRE paycheck to my student loans). I made payments every time I got paid. I took enough out to pay for the payments and then put the rest to the principal of the loans.  

Answer 2

Consolidating them is something that needs a few things considered. The main thing is how will this affect your interest rate. If you can get a lower interest rate by consolidating them, then by all means do it. I ultimately decided to consolidate mine because it gave me a nice average interest rate between all of my loans plus it meant if I ever went off the IBR plan, my monthly payment would be about $250 instead of $500 if they were all separated. The other thing to consider is would it motivate you to see them go away one at a time. If you think it’d drive you to be paying them off in little chunks, I wouldn’t consolidate them because then it’s just one big number to repay. If you end up not consolidating them, focus on making larger principle payments. You’ll pay less interest than if you save up to pay it off and only make minimum payments in the meantime

Answer 3

Don’t do anything with the federal loans (no consolidation, etc). Pay the private loans off first and defer the federal or pay the minimum on the federal (see which makes the best financial sense). Once the private is done, pay off the federal .