txengineer
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Post by txengineer on Mar 30, 2011 15:02:25 GMT -5
So, using an online calculator for APR, 3% transaction fees for 12 month at 0% interest is equivalent to about 5.49% APR. My student loans are at 7.9%. Also keep in mind that the online APR calculators assume that you will be making monthly payments until the balance transfer is paid off. You don't have to divide the payment into equal installments. You can pay the minimum payment each month and keep money in savings and pay it all off at the end of the 12 months. It really depends on your personal circumstances and the amount too. In my case, I'm talking about $20k, so it's quite a bit of interest savings. Thanks so much for that TX. For me, I can't see paying a 5.49% APR. If I put my 6.25 car loan balance on one of these offers, I'm not saving enough to make it worth the trouble. For you, if you put $5,000 of the SL on one of these, you'd save $100 in interest. If you do that new Chase Freedom offer, you'd get the extra $100 too, so that might be worth it. You are welcome. In my case, it's $20k balance transfer I'm talking about... So, close to $500 if you assume 5.49% APR. In fact, the APR is actually lower, because I won't be making equal monthly payments on my balance transfer. I'll be only making the required minimum $100-$200 per month until the last month, then I'll pay the remainder off.
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txengineer
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Post by txengineer on Mar 30, 2011 15:07:41 GMT -5
Txengineer, if you get the 20k and saving close to 2% I would say go for it. That is where we are lost, we know anything over 6% is not worth keeping but paying off 130k student loans will take some time. So should we just focus on paying down all our debts then go buy a house or will it be ok as long as we can juggle all the loans. cawiau, just curious... how did you wife accumulate such a large SL? From undergrad? What major did her do? I finished engineering undergrad and graduate school debt free. The SL I'm paying is for MBA, which is the typical case for non-daytime program students. I most likely would have received fellowship/scholarship if I wanted to take 2 years off from work for daytime MBA, but didn't want to.
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Deleted
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Post by Deleted on Mar 30, 2011 23:14:34 GMT -5
Txengineer, if you get the 20k and saving close to 2% I would say go for it. That is where we are lost, we know anything over 6% is not worth keeping but paying off 130k student loans will take some time. So should we just focus on paying down all our debts then go buy a house or will it be ok as long as we can juggle all the loans. cawiau, just curious... how did you wife accumulate such a large SL? From undergrad? What major did her do? I finished engineering undergrad and graduate school debt free. The SL I'm paying is for MBA, which is the typical case for non-daytime program students. I most likely would have received fellowship/scholarship if I wanted to take 2 years off from work for daytime MBA, but didn't want to. My wife went to Hofstra University for her undergrad. She basically never added up the total costs while there and by the time she graduated with a bachelors in biology she had over 100K in student loans. She has a masters in Public Heatlh but we paid for that out of pocket and grants/scholarships. The other 20K or so are my student loans. The student loans are between 6.8% (a bit lower for some) and 9%. My goal is to pay the higher rates quicker.
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Deleted
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Post by Deleted on Mar 30, 2011 23:20:02 GMT -5
Another question here: we are putting 25% away towards are 401K currently and contributing about 100-250 to each ROTH IRA every month (sometimes less, sometimes more).
Since I do plan (and hoping) to pay down our current credit card debt, car loan and eventually student loans should I maybe lower my 401K contributions down to what my company will match (6% for each of us) and put the difference towards the debt.
Or continue on our path which is - keep 401K at 25% - contribute some money to ROTH - pay down credit card by the end of the year - pay down car loan by beginning of 2013 the latest - split the available funds between savings (down payment one day) and paying down student loans quicker.
Anyway I should change that? Any advice is welcome.
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azphx1972
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Post by azphx1972 on Mar 31, 2011 0:50:15 GMT -5
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buster
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Post by buster on Mar 31, 2011 2:45:55 GMT -5
My wife went to Hofstra University for her undergrad. She basically never added up the total costs while there and by the time she graduated with a bachelors in biology she had over 100K in student loans. She has a masters in Public Heatlh but we paid for that out of pocket and grants/scholarships. The other 20K or so are my student loans. The student loans are between 6.8% (a bit lower for some) and 9%. My goal is to pay the higher rates quicker. That is a pretty incredible amount of student loan debt for an undergrad degree. Just curious, why did she major in Biology if she wasn't planning on going to med school (or perhaps that was the plan initially)? Good to see the Masters is already mostly covered. My personal thoughts are it's only worth going into that much student loan debt if you are going for a professional degree from a top school. I can't justify it for undergrad.
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hcj
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Post by hcj on Mar 31, 2011 13:00:32 GMT -5
I think some of the decision around debt vs retirement needs to take your tax bracket and interest rate on debt into consideration. For us, between federal and state, every dollar that we can allocate to tax deferred retirement saves us .34 cents in taxes today plus some because it keeps our income below the threshold of not being able to deduct our full real estate loss on the rental. At the same time, the highest rate we have on anything is my car at 6.25.
I take advantage of 0% offers on purchases with new cards approximately every 15-18 months. Rather than do a BT and pay the upfront fee, I switch all purchases to the new card, which lets me build up cash to pay the full balance when the 0% ends. I have business expenses that I get reimbursed for too, so I can amass $5K or so in cash in the first month or two.
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8 Bit WWBG
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Post by 8 Bit WWBG on Mar 31, 2011 16:51:09 GMT -5
...:::"So first, I need to get to the point where you were, when you started and I think that involves SAVING money first so you are covered in case all hell breaks loose.":::...
Yeah, this... If I'm taking my first step TODAY, I'm not doing it with a huge wad of cash to seed a company. All potential landlords get told that the biggest mistake new landlords make is "failing to have adequate reserves to cover vacancies and/or repairs". Well that is a LOT of cash, and that doesn't even cover the down payment I'd need to buy the house.
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Deleted
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Post by Deleted on Mar 31, 2011 17:01:58 GMT -5
My wife went to Hofstra University for her undergrad. She basically never added up the total costs while there and by the time she graduated with a bachelors in biology she had over 100K in student loans. She has a masters in Public Heatlh but we paid for that out of pocket and grants/scholarships. The other 20K or so are my student loans. The student loans are between 6.8% (a bit lower for some) and 9%. My goal is to pay the higher rates quicker. That is a pretty incredible amount of student loan debt for an undergrad degree. Just curious, why did she major in Biology if she wasn't planning on going to med school (or perhaps that was the plan initially)? Good to see the Masters is already mostly covered. My personal thoughts are it's only worth going into that much student loan debt if you are going for a professional degree from a top school. I can't justify it for undergrad. Yep the plan/goal initially was her going to medical school. Somewhere in between she changed her mind.
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8 Bit WWBG
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Post by 8 Bit WWBG on Apr 1, 2011 9:22:16 GMT -5
I'm still reeling that friggin HOFSTRA costs $100k! and we had that discussion like 6 months ago! Was that for just 8 semesters, or did she have to do extra time from changing majors?
I'd imagine Phil would agree with getting rid of high interest debt as soon as possible because that is a real rate of return that cannot be beat anywhere else.
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Deleted
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Post by Deleted on Apr 1, 2011 9:34:23 GMT -5
I'm still reeling that friggin HOFSTRA costs $100k! and we had that discussion like 6 months ago! Was that for just 8 semesters, or did she have to do extra time from changing majors? Nope, 8 semesters, nothing extra. If you go to their website and check at tuition it is here www.hofstra.edu/sfs/bursar/bursar_tuition.html#tuitiontheir full time tuition (12-17 credits) for undergraduates is $15,375 per term so $123,000 for 8 terms and that is without books, room and board, etc. I guess it got a bit more expensive since my wife left 3 years ago (2004 - 2008)
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Deleted
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Post by Deleted on Apr 1, 2011 9:35:46 GMT -5
I'd imagine Phil would agree with getting rid of high interest debt as soon as possible because that is a real rate of return that cannot be beat anywhere else. Yeah and it makes sense, so guess I am sticking to my current plan
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8 Bit WWBG
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Post by 8 Bit WWBG on Apr 1, 2011 9:49:52 GMT -5
...:::"Yeah and it makes sense, so guess I am sticking to my current plan":::... I wish DF had stuck to MY plan of not accumulating it in the first place. Women At least she is helping pay it off big time.
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Deleted
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Post by Deleted on Apr 1, 2011 10:54:19 GMT -5
...:::"Yeah and it makes sense, so guess I am sticking to my current plan":::... I wish DF had stuck to MY plan of not accumulating it in the first place. Women At least she is helping pay it off big time. My wife is on board and hopefully it stays that way. But sometimes it gets so depressing thinking about the moutain of debt we have to pay.
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8 Bit WWBG
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Post by 8 Bit WWBG on Apr 1, 2011 10:59:27 GMT -5
...:::"But sometimes it gets so depressing thinking about the moutain of debt we have to pay.":::...
That, and had we done it my way, we'd be sitting on a mountain of money. But yes, like you, I am thankful that at least they are helping fill in the hole instead of dig it deeper.
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