Debt: Paying Off vs Loan
D M
7 years ago
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maifleur01
7 years agosushipup1
7 years agoRelated Discussions
Pay down mortgage or pay off student loans--?
Comments (10)You can get either death or disability insurance on your mortgage, or both. There's about four times the possibility of disability for an extended period that there is of death ... and, while a funeral is expensive, dead people don't eat, but disabled people do ... and may need medical/rehabilitative costs, as well. Some prefer to buy a term policy for one or both, themselves, for if the bank sets it up, they are the payee, not the person(s) purchasing the home, whle if the homeowner purchases it, they are the payee and it will be their responsibility to pay the lender. Some prefer to have coverage at a specific level throughout, rather than the decreasing value as the principal gets paid off, as usually there is little difference in premium, and as the debt is reduced through regular payment down of principal, there is some extra available to support the family in a difficult time. When paying student loan, usually one knows what portion of the payent goes for interest and which goes to pay down principal owing. But the level of mortgage payment remains level throughout, which means that in the early days of the loan, when the balance owing is high, the amount that goes to interest each year must be high, meaning that little of each payment goes to pay off principal. Many people pay little attention to the amount of principal that is paid off annually through the first few years, though many of them received a schedule showing what the ratios were at the time of each payment, throughout. They are greatly surprised when they find out how little of the principal has actually been paid, at the end of each year. They are suprised to learn that, in those early years, if they made an additional payment of an amount equal to one of the month's payment, designating it as to reduce principal only, it would reduce the balance owing by a larger amount than did all of the other 12 monthly payments. With student loans, the amount allocated to principal and to interest is more easily identifiable, I think. Good wishes. ole joyful...See MorePay auto loan early?
Comments (6)Hi bcrawfo2, What kind of rate are you paying? Like somewhere around 12 - 15%? Not up to 20%, I hope. Do you have some funds that you can tap into in case of emergency? Lacking such, could you borrow some funds temporarily from your bank/credit union? Are you sure? Even in case of layoff? At what rate? What other destination do you have in mind for the money? Fist thing in my mind when I read your post was ... "Pay off the &$%#)@ loan!". I've been getting an offer about 3 times a year from a (foreign-owned) banking system ... They'll lend me up to $3,500. - maybe more if I call them right away! ...." Yeah, right! At what interest rate? Well, about 30%, regular rate - could be adjusted. A bit. I told them to quit sending them, as I have a fully secured line of credit at my financial institution that would charge me, if I called upon it (and I'm not using it at present) 4.25%, last time I asked, three or four months ago - probably slightly higher now. I was a bit rude to him ... and he chastised me. Imagine - a small loan outfit chastising a member of the public for being somewhat rude when discussing small loans and interest rates!? It's usually the other way around! Hope you're having a reasonably happy week. ole joyful...See MoreStudent Loan Reimbursement to pay off Credit Cards?
Comments (3)I actually did this. I had about 6k in credit card debt, store charges with 22.9%+ interest rates. I decided to pay those off with my student loan refunds. I calcuated that I would save more than $1,500 a year in interest, plus I have about an extra $300 a month- which now goes to student loans. However, I have close to 85k in student loan debt. I got my BS- International Affairs and Psychology and MA- Teaching and Technology back to back. So I had no time to pay down my student loans. Here is a simple way to cut cost of internet and cable. Call and cancel your service and cite some other company can give you a better deal if you start up with them. They won't want to lose your business. I was paying 150 a month for basic cable and high speed internet (need that for work), but after I got it down to 50 a month for the next six months. Here is a link that might be useful: Article on How to Save...See MoreMonthly Debt vs. Overall Debt (LONG)
Comments (13)What did she "pay" ... well, "agree to pay" for her new car when she bought it two years ago? And how much has she paid over all of those months between then and now? And how much does she still owe? If she goes to buy a new one, how much will the dealer allow her as trade-in on her current car (with the less-than-attractive side) as reduction in price of the new one? She'll be astonished at the amount that the dealer will allow her as trade-in on her car with the caved-in side when she goes to buy her new car. I'll bet that it'll be less than she still owes, probably quite a bit less. So that, if the new car's price may be, say, $18,000. ... ... she may end up owing something like $22,000. on her new loan. On the new car that she paid $18,000. for ... ... but now, even if only a week after she bought it, and without a mark on it, would be worth probably about $14,000. Two thirds of what she owes? Not my idea of a good time! Would she listen if you drew a set of patterns for her, showing (with approximate sizes relative to dollar amounts), of what she paid for her current car, how much she's paid over the 24 months, how much she still owes, how much difference there is between her cost, what she's paid, what it's "worth" now as allowance toward an upgrade, etc. And showing how she's paying so much monthly on her student loan, so much monthly on her car loan, splitting those two payments into principal repayment and interest components, running the interest stream off the edge of the paper, as lost. So - she's working about half of her time monthly for ... ... nothing. But - currently, she's not working, is she? So how does she make car payments? How long before they may repossess it ... ... leaving her walking. Which wouldn't happen if the loan was all liquidated. Working much of her time - to pay someone else rent for the use of their money. And as long as she uses other folks' money ... she'll have to pay rent on it. Which is money that could have stayed in her pocket, had she driven the nearly new car (with the stove-in side) longer ... ... until she's paid off all of the money that she'd borrowed to buy it. Which would mean that the amount that she would be allowed at trade-in would be all hers, instead of mostly (or all - or maybe even more than all) going to pay off the loan that she still owes on the current car. Which would mean that the amount that she would have to borrow on the new car would be much lower. So - if she were paying the same amount per month ... the loan would be paid off in short order. Then she could keep putting that amount away (or most of it) to pay off her student loan faster. Could you draw comparable sized boxes to the amount of value that each item is, with labels, and the proportion of it that's hers, etc.? When we get stuck in a snow bank, we can do a lot of spinning wheels back and forth, with little result. Except burning a lot of gas. Wear and tear on tires. Wasting time. And, if we're not careful, when using an automatic transmission, burning up the transmission. And getting where? Nowhere! And getting not just ourselves, but people sitting in the car with us, more than likely, somewhat bent out of shape with irritability. Smells a lot like this situation, doesn't it? Just some thoughts. Or ... would you call it my whine? ole joyful...See MoreS Rodriguez
7 years agoS Rodriguez
7 years agoUser
7 years agoD M
7 years agolast modified: 7 years agobry911
7 years agoD M
7 years agolast modified: 7 years agomaifleur01
7 years agoD M
7 years agolittlebug zone 5 Missouri
7 years agolast modified: 7 years agomaifleur01
7 years agoD M
7 years agoD M
7 years agolast modified: 7 years agoD M
7 years agolittlebug zone 5 Missouri
7 years agobry911
7 years agolast modified: 7 years agoD M
7 years agobry911
7 years agolast modified: 7 years agoD M
7 years agobry911
7 years agolast modified: 7 years agojoyfulguy
7 years agoUser
7 years agolast modified: 7 years ago
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