EJR
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| Life after College |
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Background : I'm currently wrapping up college with one semester left to go and am trying to plan for the future. I've already accepted a job that will begin in may with a salary of 52,000 with potential yearly bonus of 10%-20%.
I currently have around $50,000 in student loans.
Federal Loans at 3.4% to 6.8%
Current Principal Balance: $19,497.66
Unpaid Interest: $1,787.06
Total Current Balance: $21,284.72
Private Loans at 7.25%
Current Principal Balance: $24,560.44
Unpaid Interest: $5,660.93
I'll have to start making payments 6 months after graduation so I'm looking for advice as far as what to attack and whether or not I should be saving instead of vigorously paying off loans. Based on a budget that I've created for myself, I'm planning on putting roughly 20% of income towards loans, 20% towards savings, and 5% towards a 401k (technically I can't start until 6 months of working). Most of the remaining will be spent on rent, food, insurance and misc. However, will all bills calculated, it appears that 18% goes unspent, but I'm sure that there are just unforeseen costs that I haven't calculated.
Here is the monthly breakdown for your pleasure :
Salary $2,800.00
Rent $475.00 17%
Utilities $75.00 3%
Internet $15.00 1%
Gas $150.00 5%
Car Insurance $125.00 4%
Car Payment $-
Savings $560.00 20%
401k $140.00 5%
Health Care $20.00 1%
Loans $500.00 18%
Food $200.00 7%
Web Hosting $8.00 0%
Cell Phone $-
House Supplies $30.00
Remaining $502.00 18%
The food cost and rent probably look low, but that is because I'm splitting expenses with a roommate. Company also pays for my phone, so that explains the $0.
Well, there you have it.. any thoughts and opinions would be helpful.
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Wed Jan 11, 2012 4:06 am |
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coaster
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Don't forget the emergency fund.
And get those private loans paid off first.
Best wishes and good luck. 
~Tim~
Eye Candy : Why Whimsy
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Wed Jan 11, 2012 6:27 am |
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oldguy
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Good job on getting a job before graduation - and good salary.
Yes, hammer the high interest 7.25% loans - and pay the minimums on the low interest loans.
BTW, the 5% 401k cost is $217/m, not $140.
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Wed Jan 11, 2012 1:20 pm |
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littleroc02us
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Just think the faster you pay off the student loans the sooner you free up $500 a month, plus bonuses as you stated.... Good luck!
Romans 13:8 “Owe no man any thing, but to love one another: for he that loveth another hath fulfilled the law.”
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Wed Jan 11, 2012 5:00 pm |
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EJR
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Should I be putting my entire bonuses towards the loans?
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Wed Jan 11, 2012 7:33 pm |
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littleroc02us
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Others would say no, but your young so bust your butt and put every dime towards your loans. Do you want them to hang around forever like most people do? Also school loans aren't bankruptable so if you run into trouble later on the Gov't will garnish your wages. You will have time later to get rich for retirement.
Romans 13:8 “Owe no man any thing, but to love one another: for he that loveth another hath fulfilled the law.”
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Wed Jan 11, 2012 8:21 pm |
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imperialloan
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For a young man, you appear very intelligent and I mean that as a compliment. Most people don't create detailed sheet about their income and expenses so you are already there. Go ahead and tackle your loans first. I would not worry so much about saving a lot of money right now. Once you have paid down (or off) the loans, then you can begin to save aggressively. Thanks. I hope this helps in some way.
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Thu Jan 12, 2012 3:47 pm |
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vitalogist
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I have to agree, you're one intelligent man. I wish I was as smart as you when I was about to finish college. Since you have a good grasp of your financial standing may I suggest that you use part of your monthly savings as payment for your student loans. The quicker you wrap that up the better your credit standing will be.
www.purechecks.com
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Fri Feb 03, 2012 7:13 am |
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Atalien
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I think your plan looks great, especially since you are splitting costs with a roommate. The only thing I would probably change would be the 20% savings.
After you get a 3-6 month emergency fund, I would then stop saving that 560 a month and put that on the private loans along with the other 20% you were already putting on them. Or if your interested in other forms of savings, instead of dropping all of that money on the loans, I might suggest you look into a roth ira. $100-$200 a month could a long ways, since you would be starting so early.
Its nice to have a bunch of money in the bank, but I think it would be of better use to pay off the loans with money that wont be gaining much interest. I am assuming your putting it in a savings account or some other low risk/low interest account.
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Fri Feb 03, 2012 1:10 pm |
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EJR
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Based on my budget and expected savings, does anyone know how I would figure out my prospective pay off date? I don't know if five years is too aggressive. It gets complicated quickly with all of those different interest rates, but I know that if I were to consolidate they would average the percentage and take about a quarter percent premium, so I don't want that.
Any input or guidance would be appreciated.
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Mon Apr 02, 2012 7:22 pm |
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oldguy
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quote:
how I would figure out my prospective pay off date?
You could calculate the 'consolidated' rate by adding each component and dividing by the total. Eg, (7.25 x 30,221 + i2 x L2 + i3 x L3 ---) / 50,000 = i. Then use an online loan calculator to check various payments vs time. It looks like the $500/m takes about 10 yrs. (That would be an estimate, you will probably prepay the 7.25% while paying mins on the others - so that will shoren the payoff by a few months.
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Mon Apr 02, 2012 8:44 pm |
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EJR
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Can I just get a few comments on consolidating loans, thoughts and feedback for my situation. Do you think that I'd be able to find a lender in the current market to give me a better rate that what I'm getting on my loans. The 7.25% for 25,000 seems high to me, but maybe I'm misinformed.
Thanks.
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Sat Apr 07, 2012 12:15 am |
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loanuniverse
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quote:
Originally posted by EJR
Can I just get a few comments on consolidating loans, thoughts and feedback for my situation. Do you think that I'd be able to find a lender in the current market to give me a better rate that what I'm getting on my loans. The 7.25% for 25,000 seems high to me, but maybe I'm misinformed.
Thanks.
It will be difficult to beat that rate with a loan. The rate looks high because you are seeing a lot of low rates for mortgages. The problem is that you should be comparing them to unsecured personal loans, which is what you would have to get to replace them.
We have not even discussed credit score so that could be a reason why you might not be able to beat the rate.
Want to know how much you would pay? Go to a place like Lendingtree and run through their application. You will get hit with a credit inquiry in your credit report, but it will be free to find out.
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Sat Apr 07, 2012 3:11 am |
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Destiny
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Hi, first I like to appreciate you for managing your expenses very beautifully; it seems that you are very smart and intelligent. Well gentle man I will suggest you to clear your small loans first. Once you going to end your small loans then the pressure will release slowly and that is most important.
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Thu May 24, 2012 5:21 am |
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