Paying off whose loans?

[gem]

We are at a point where we are ready to pay off some student loans. My husband and I both took out loans for grad school. My loans are at a very low interest rate. His loans are at a very high interest rate. It seems like we should pay his off first, but I'm kind of uncomfortable paying off HIS debt with MY earnings while I still have MY loans hanging over my head. I know that once we stop the hemorrhaging on his interest payments we'll have a lot more peace of mind and will be able to do some great things for our family. So I don't know why I'm hung up about this! Advice?

[ides]

We consider our money and debt 'ours' no matter who earned or who created it. It makes sense to pay down the debt with the highest rate. If you two are more of a mine and yours type of couple I could see why it might feel weird. To me it speaks of differences or insecurities of your relationship. Maybe can you pay more on the higher interest but still add a bit extra onto the lower one? Maybe that would ease your worry/anxiety and be a compromise?

[JDAZ11]

Pay his first. We just pay by interest rate.


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[Mrs. MD, Esq.]

I get it...in a divorce situation, each person gets their student loans (but some judges might take the differences in repayment into consideration when divvying up other debt/assets to achieve an equitable division). Would a post-nup be something you/your DH would be comfortable with or would that not be an option for you?

[gem]

Helpful comments. We have always been "what's yours is mine." The loans are the only debts or assets I can label as his/mine because they're the only thing in only one of our names. This has never bothered me before now.

Do I have some nagging insecurity about our relationship? I mean of course that's really the issue here. I would feel pretty sick if I supported him through med school, residency, paid for his education, then we split up. Yeah. Maybe the what-ifs are more on my mind as he nears the end of residency. I think that it is very unlikely that we would divorce, and we're in a better place now than we have been in a very long time; but am I 100% sure we'll be married forever? I can't say that.

I do not think DH would go for a post-nup. When I tried to discuss my discomfort about this plan to him he really bristled at the implication that I was viewing my earnings as "mine."

[OrionGrad]

Paying off whose loans?

We consider our money and debt 'ours' no matter who earned or who created it. It makes sense to pay down the debt with the highest rate.

This.
ETA: I didn't see your reply before I posted. I think your feelings/concerns are totally understandable. I've had similar thoughts myself as we started paying down med school loans. But IMO you have to let the rational side win out (pay lowest interest rate first) over fear/insecurity. Of course if you have actual concerns about your marriage, then that's something different altogether.

[poky]

Helpful comments. We have always been "what's yours is mine." The loans are the only debts or assets I can label as his/mine because they're the only thing in only one of our names. This has never bothered me before now.

Do I have some nagging insecurity about our relationship? I mean of course that's really the issue here. I would feel pretty sick if I supported him through med school, residency, paid for his education, then we split up. Yeah. Maybe the what-ifs are more on my mind as he nears the end of residency. I think that it is very unlikely that we would divorce, and we're in a better place now than we have been in a very long time; but am I 100% sure we'll be married forever? I can't say that.

I do not think DH would go for a post-nup. When I tried to discuss my discomfort about this plan to him he really bristled at the implication that I was viewing my earnings as "mine."

What are the relative AMOUNTS of the debts? How long will it take to pay his off at the current amount you can put toward it, and how long would it take to pay yours off? Any chance at all of refinancing his at a lower rate?

[gem]

What are the relative AMOUNTS of the debts? How long will it take to pay his off at the current amount you can put toward it, and how long would it take to pay yours off? Any chance at all of refinancing his at a lower rate?

The amounts are similar. We could pay either off in 4 years relatively comfortably; 2 years if we were more aggressive.

I know the last time we looked at refinancing it didn't make sense, but it has been a couple years. I should probably investigate that again.

[MrsK]

Which loan has a larger balance? If one is significantly smaller, I'd tackle that one first. Is it possible to refinance the med school loan at a lower interest rate?

[MrsK]

What are the relative AMOUNTS of the debts? How long will it take to pay his off at the current amount you can put toward it, and how long would it take to pay yours off? Any chance at all of refinancing his at a lower rate?

Funny, I just posted exactly this before reading the responses.

[poky]

The amounts are similar. We could pay either off in 4 years relatively comfortably; 2 years if we were more aggressive.

I know the last time we looked at refinancing it didn't make sense, but it has been a couple years. I should probably investigate that again.

I'd probably pay both off at once, equally, in that case, if that won't bother him. Do look into refinancing; worst case it won't help, best case, it makes his rate lower than yours, right? If you can't refinance, figure out how much EXTRA interest you'll pay if you pay his debt off half as fast until residency's over, and decide if being more "fair" is worth that amount of money. It might be.

[JDAZ11]

Paying off whose loans?

Helpful comments. We have always been "what's yours is mine." The loans are the only debts or assets I can label as his/mine because they're the only thing in only one of our names. This has never bothered me before now.

Do I have some nagging insecurity about our relationship? I mean of course that's really the issue here. I would feel pretty sick if I supported him through med school, residency, paid for his education, then we split up. Yeah. Maybe the what-ifs are more on my mind as he nears the end of residency. I think that it is very unlikely that we would divorce, and we're in a better place now than we have been in a very long time; but am I 100% sure we'll be married forever? I can't say that.

I do not think DH would go for a post-nup. When I tried to discuss my discomfort about this plan to him he really bristled at the implication that I was viewing my earnings as "mine."

Oh, well if you aren't 100% sure you'll be married forever, then don't pay his. Mine have a higher interest rate, and it's mainly DH's income, so really easy for me to say pay off the higher interest rate first. If things were reversed, I may feel more uncomfortable.


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[fluffhead]

he really bristled at the implication that I was viewing my earnings as "mine."

I would certainly feel the same way. If you're approaching this situation as hedging bets on whether you'll stay married, you might as well separate your finances now. But then "his" earnings when he's working to his potential will just be "his."
I think you should just do what's best for the family - pay off the high interest loans. In the big picture, it's a small price to pay for a rather large show of confidence in your relationship.

[MrsC]

I would feel weird about it too in your situation. I would also feel uncomfortable with just paying off mine if he was the only one earning. But I think we'd get past it and do what makes sense. Would he pay your loans without hesitation if the tables were turned?

[diggitydot]

Paying off whose loans?

If you guys haven't been married long, I can totally see your perspective.

FWIW, we pay off all loans with the highest interest rates first (which are his), but just because that's how we roll doesn't mean it's the right thing for everyone or every situation.