JessReplanted Posted April 27, 2017 Share Posted April 27, 2017 From what I have read, there are no real shortcuts? We just have to contact the loan companies and fork over all the money? Does anyone have anyone magic tricks (tips) for me? Thanks! Quote Link to comment Share on other sites More sharing options...
Elizabeth 2 Posted April 27, 2017 Share Posted April 27, 2017 Unfortunately, pretty much. Depending on when the loans were made, you can sometimes get an income based repayment program or another similar program. Your loan servicer (if it was a federal subsidized or unsubsidized loan) will be able to help you through it. Check on their websites to check. Otherwise, snowball. Pay the smallest off first and then roll over the payments ala Dave Ramsey. We've been doing that with ours and it's going down faster than if we hadn't added a bit each month. 4 Quote Link to comment Share on other sites More sharing options...
La Condessa Posted April 27, 2017 Share Posted April 27, 2017 Make sure that when you make that extra payment, they are actually putting it towards principal and not counting it as advance payments on future interest. Some banks will actually do that if you do not specify--one that used to hold our loan required the additional amount to arrive as a paper check via snail mail with the words "principal only" written on the check, or they would apply it to future interest payments instead. Most banks will offer a small decrease in interest for setting up automatic payments. Shop around and see where you can get the best interest rate. I found that, for us, that was Sofi (by a fair margin). And if you go through this link http://www.mrmoneymustache.com/2015/05/06/sofi-review/ from Mr. Money Mustache, you will get a $300 bonus, which you can then turn around and apply to your loan principal. But yeah, pretty much, you just have to pay more than you are required to each month so you are paying down your principal faster. 3 Quote Link to comment Share on other sites More sharing options...
StephanieZ Posted April 27, 2017 Share Posted April 27, 2017 If you owe more than you can reasonably pay off in 10-15 years, then you should definitely research IBR, PAYE, REPAYE, etc. These are helpful for folks with loans in the range of 2-4x or more of their annual salary. I have read a lot about these sorts of programs and it is VERY complicated figuring out which one is best for your situation and planning the strategy. How much do you owe? How much does your dh owe? What are your annual incomes? (Do you expect those incomes to increase or decrease by a lot in the next 10 years?) If you owe more than 2x your annual income (and your income isn't going up by a lot in the next few years), you should probably be on PAYE or REPAYE -- and essentially be assuming you'll eventually get a big loan forgiveness that will be TAXABLE, and so you have to plan for THAT tax (save monthly), as well. If you owe less than your annual income, then, just pay it off as quick as reasonably you can like any other debt. If you owe between 1 and 2 times your annual income, you need to do a lot of number crunching. Can you manage your current monthly payments? What's the interest rates? How many more years do you have left? It's VERY important to thoroughly understand your options and the requirements, documentation requirements, deadlines, etc. One small error or late paperwork can cost 10s of thousands of dollars or more. BE VERY WARY OF PRIVATE LENDERS/consolidations!! Obviously, you might not want to answer all these questions here in a public forum . . . but I'm just throwing out the questions that are pertinent to figuring out what the right approach is . . . It's VERY complicated! 3 Quote Link to comment Share on other sites More sharing options...
Elizabeth 2 Posted April 28, 2017 Share Posted April 28, 2017 One thing I remembered. Talk to a CPA first before you do this to look at all of the ramifications! But. Compare how they will calculate Income Based Repayment if you consider both of your incomes and loans vs. if you file married-filing single and individual loans. If one has no income, but high loans, it may be worth considering until the year of the last payments. 2 Quote Link to comment Share on other sites More sharing options...
luuknam Posted April 28, 2017 Share Posted April 28, 2017 From what I have read, there are no real shortcuts? We just have to contact the loan companies and fork over all the money? Does anyone have anyone magic tricks (tips) for me? Thanks! Last time I looked there are some magic tricks for some specific cases - like, if you work as a public or public school librarian for 10 years, or I think same thing as a public school teacher, and you always make your payments during that time, any amount left could be forgiven (if you file the paperwork). Of course, that could've changed - I never looked that deeply into it, but anyway... potentially worth looking into. 1 Quote Link to comment Share on other sites More sharing options...
Shellydon Posted April 28, 2017 Share Posted April 28, 2017 No trick. We paid off $40K in 4 years by working as many extra hours as possible and chunking money towards loans. We continued to live cheap until they were done. 3 Quote Link to comment Share on other sites More sharing options...
Guest Posted April 28, 2017 Share Posted April 28, 2017 It makes me so mad that you can only refinance once. DH consolidated his large grad school loans when he graduated and locked in 6%. Five years later they were around 1-2%. Grrr. 2 Quote Link to comment Share on other sites More sharing options...
SKL Posted April 28, 2017 Share Posted April 28, 2017 If you have more than one interest rate, pay the highest (after-tax) rate loans off fastest. If you can't make the scheduled payments, ask one of your lenders about consolidation / restructuring options. There used to be a temporary forbearance option, not sure if there still is. Ask for help before you incur late fees - they will work with you. Some people can get loans written off for taking certain jobs, but these are very limited situations. Can't hurt to ask, though. :) When I graduated, I had 25 different loans. I used to track them on a hand-drawn spreadsheet in a notebook. Ah, the good old days, LOL. 3 Quote Link to comment Share on other sites More sharing options...
teachermom2834 Posted April 28, 2017 Share Posted April 28, 2017 If they are federal loans there are the income based payment plans. These will not make you pay off your loan more quickly but they do give relief on a monthly basis if your loans are too large for you to handle. At the end of a set period (it varies 10-25 years depending on loan) they are forgiven but are taxable income that year. This is a coping strategy for people with large loans not a trick to get it paid off early. There is forgiveness for working in public service for 10 years and I do not believe (though I could be wrong) that the forgiven amount is taxed in this instance. Income based repayment combined with public service forgiveness is one way people manage large loans. 1 Quote Link to comment Share on other sites More sharing options...
madteaparty Posted April 28, 2017 Share Posted April 28, 2017 The only "trick" I know is that there's a tiny interest cut for setting up online payments. Otherwise, yes, no tricks, just monthly rent on our degrees which will hopefully end by the time we start paying for the kids'. 1 Quote Link to comment Share on other sites More sharing options...
SparklyUnicorn Posted April 28, 2017 Share Posted April 28, 2017 I was under the impression she meant is there any way to get a reduction if you pay it off in full right now. 1 Quote Link to comment Share on other sites More sharing options...
La Condessa Posted April 28, 2017 Share Posted April 28, 2017 I have heard this, but my experience is that this hasn't been an issue. Our smallest loan was a $2k loan. When DH got a bonus on top of a check with a large chunk of OT, we sent like $1k to it all at once, but didn't specify to have it go towards principle. It DID put our next due date out a whole lot, but it did still reduce the principle by $1k. And then when we had one of those magical extra paycheck months, we just sent the payoff amount and it was gone. We also put a large hefty chunk on the next loan and again, it did extend the next due date. But the principle still goes down. It hasn't been an issue with any of the other places that have held our loans at different times, but that one bank did everything they could to make it difficult to lessen the amount of interest they would eventually receive. Quote Link to comment Share on other sites More sharing options...
JessReplanted Posted April 28, 2017 Author Share Posted April 28, 2017 I was under the impression she meant is there any way to get a reduction if you pay it off in full right now. Yes, this is what we are looking to do. All of the responses have been helpful, thanks! 1 Quote Link to comment Share on other sites More sharing options...
SparklyUnicorn Posted April 28, 2017 Share Posted April 28, 2017 Yes, this is what we are looking to do. All of the responses have been helpful, thanks! Yeah I guess where you save is not paying so much interest. Otherwise, I know of no way to get a reduction in the pay off amount. 1 Quote Link to comment Share on other sites More sharing options...
Ailaena Posted April 28, 2017 Share Posted April 28, 2017 Before I went into default, they offered me a decent deal if I paid in full; but that's probably not the route you want to go... Have you asked and they told you no? Quote Link to comment Share on other sites More sharing options...
vonfirmath Posted April 28, 2017 Share Posted April 28, 2017 I have heard this, but my experience is that this hasn't been an issue. Our smallest loan was a $2k loan. When DH got a bonus on top of a check with a large chunk of OT, we sent like $1k to it all at once, but didn't specify to have it go towards principle. It DID put our next due date out a whole lot, but it did still reduce the principle by $1k. And then when we had one of those magical extra paycheck months, we just sent the payoff amount and it was gone. We also put a large hefty chunk on the next loan and again, it did extend the next due date. But the principle still goes down. It was an issue for both me and my dad. (Mind you, I paid off my last school loan 15-ish years ago now). To the point, I was sending in extra with every payment, and could not get any paper proof it was being applied to principal. So I finally ended up paying off the school loan in one lump sum by paying it off with a personal loan. Then I was able to attack the personal loan aggressively and see the balance actually going down as I paid it off. Quote Link to comment Share on other sites More sharing options...
StephanieZ Posted April 29, 2017 Share Posted April 29, 2017 Yes, this is what we are looking to do. All of the responses have been helpful, thanks! Ahh, now THAT's great news. Yes, just call, get the payoff amount, and make it so. Like many debts, if you've got the cash in hand, then paying it off is awesome and nearly always a great idea. You are guaranteed a great return on your pay off . . . (no more interest accruing!). They'll walk you through it. I did it by phone. I did it about 20 months ago, and it's awesome to no longer have those loans. 2 Quote Link to comment Share on other sites More sharing options...
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