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paying back the devil

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  • paying back the devil

    Well, that depends entirely on what your interest rates are and your loan terms.

    Here is a calculator that Kris posted:

    http://www.finaid.org/calculators/scrip ... yments.cgi

    and another one with extra payment options and amortization table :

    http://www.bankrate.com/gookeyword/loan-calculator.asp

    Our loan will start at 2.75% interest with direct deductions from our checking account. It will go to 1.75% after 3 years. We owe upwards of $230,000.

    For the first 3 years, I expect we will pay around $1000 per month. After the first three years, I expect the payment will drop by about $100 per month.

    Financially it makes sense for us to take the full 30 years to pay it back. However, I don't know if writing that check for 30 years is good for our sanity. We shall see.

    If you have 150K at 3% (consolidate!!!) and pay it back over 15 years, you will pay just over $1000 a month. Over the lifetime of the loan you will pay 37K in interest. However, by consolidating your loan you get incentives for paying on time and deductions from your checking that will save you thousands of dollars in interest.

    I urge anyone who has not done it, who is finished with med school to consolidate their loans NOW. The interest rates are going up by a lot, in just a few weeks. Believe me, it is a good way to go.

    If you have more than one lender you can consolidate through whomever you want. I like the company we went through, and if you would like more information on that, let me know and I will send you a private message.

    If you have one lender, you can still consolidate your loans through that lender.

    Private loans can not be consolidated as far as I know, but ALL stafford, sub and unsub and perkins loans can.

    Right now the rate on stafford loans is 2.77% and it will go up July 1st.

    You can consolidate your loan, depending on amount and lender for 10, 15, 30 years.

    If you consolidate you lock in your interest rate. WHen we started medical school, only 5 years ago the interest rate for stafford loans was 8.0%. If we had to pay back at that rate we would have had to pay double the monthy payment.

    Consolidate, consolidate, consolidate!!! It is so worth it. You will not get a better interest rate.
    Heidi, PA-S1 - wife to an orthopaedic surgeon, mom to Ryan, 17, and Alexia, 11.



  • #2
    We have a similar amount of debt. We consolidated most of it last year at 3 % over 30 years. Our loan payment is $666.00. ( Pretty funny, considering your subject line.....) Somehow, 2 small loans did not get consolidated along with all the others. Now the loan company (Great Lakes) refuses to consolidate them as well and has been very unhelpful. I don't think we can re-consolidate the original loans along with the two "strays" with a new company. We aren't sure what the next step is with that. The 2 "stray loans each run about $130 a month -- but the payback is 10 years. So our current total loan payment per month is a little over $1000. The consolidation is key, but be careful when you do it. I wouldn't use this company if I did it again. My DH still handles all the loan stuff himself; he is a financial disaster. He hasn't dealt with this wierd loan thing yet, and I am not approved to deal with it myself. I think that also means I can't be held accountable at any point, but I'm not sure. I hope this info helped ease your worries. The $1000 payment isn't that bad. We didn't go overboard buying our house and DH's income is significant. Still, we'd love to a get a grant to pay off a big chunck of them and free up that cash each month before we are .... almost 70.
    Angie
    Gyn-Onc fellowship survivor - 10 years out of the training years; reluctant suburbanite
    Mom to DS (18) and DD (15) (and many many pets)

    "Where are we going - and what am I doing in this handbasket?"

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    • #3
      Heidi -- you've done your homework on this! My understanding is that once you have consolidated you lose that 6 month grace period to start paying back. Is that what you found?
      We've still got a while to figure it out, but I know we will probably go 1-2 months between residency and attending and this would be a good thing to factor in.

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      • #4
        Originally posted by nmh
        My understanding is that once you have consolidated you lose that 6 month grace period to start paying back. Is that what you found?
        I think you're right about this, Nellie. We consolidated our loans. DH finished residency last June and we had to start paying back the loans in July. I don't know if this was because we consolidated or if it was for a different reason, but it was something that we really hadn't planned on. Since DH didn't get his first paycheck till August, it was a little tight that month!

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        • #5
          reaching wwaaaayyy back to when I worked in the student loan dept but I'm pretty sure that you lose the 6 mo grace period when you consolidate.

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          • #6
            I think that used to be true about the grace period, but I don't think it is anymore. On the other hand, giving up your grace period to get 1.5% less interest is a good deal in my book. We already used up our grace period when we consolidated, I really don't know if we get more, or whatever, all I know is that I don't have to pay now.
            Heidi, PA-S1 - wife to an orthopaedic surgeon, mom to Ryan, 17, and Alexia, 11.


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            • #7
              Thanks! That's what I was thinking. I agree -- it is worth a few months to get the better rate!

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