Student loan payments: get advice and actual numbers here Forum

[bk1]

When refinancing loans after a clerkship, does anybody know if it's better (a) to first use the clerkship bonus to pay down loans and then refinance or (b) to refinance and then use the bonus to make a big payment? (i.e., does the order matter at all?) just wondering if having the extra bonus cash on hand would lead to a better refinancing rate, even if it means there's more to refinance. Thanks in advance!

Ask the loan officer you are working with, though it may not make a difference whichever you choose (if it does, my guess would be the higher liquidity would be more beneficial unless the lower balance puts you below some threshold on the underwriting guidelines of the lender).

And if your refi rate is low enough, it also may not be worth it to throw the bonus into your loans since you can get a better return elsewhere.

[SmokeytheBear]

When refinancing loans after a clerkship, does anybody know if it's better (a) to first use the clerkship bonus to pay down loans and then refinance or (b) to refinance and then use the bonus to make a big payment? (i.e., does the order matter at all?) just wondering if having the extra bonus cash on hand would lead to a better refinancing rate, even if it means there's more to refinance. Thanks in advance!

I think it depends on who you refinance with (for example FR requires that you refinance at least $60k I think).

Also if you go through FR, they sometimes want to see a good amount of liquidity, so having the money in your account pre-refinance can help.

Also if you go through FR, even if you make big payments after you refinance, it doesnt change your monthly payment (see my post above).

All in all, I would make the big payment before you refinance, as you start accumulating interest on day 1. But for the above stated reasons, you might have to wait to make that payment until day 1.

[Johann]

I'm on the 10 year but hoping to pay it off in 4 for that interest rebate.

To be on the safe side, I'm just hoarding cash for that purpose, knowing that my monthly payments won't change or get pushed back from early payments.

brilliant. if you come just short, let me know if youd like to make a deal.

this could be the start of johanns refi business right before the FR interest clawback expires.

[boredtodeath]

I'm on the 10 year but hoping to pay it off in 4 for that interest rebate.

To be on the safe side, I'm just hoarding cash for that purpose, knowing that my monthly payments won't change or get pushed back from early payments.

brilliant. if you come just short, let me know if youd like to make a deal.

this could be the start of johanns refi business right before the FR interest clawback expires.

If you're just putting that money in a savings account while you wait to accumulate enough for the payoff, though, aren't you losing out in the % return game?

[JenDarby]

I'm on the 10 year but hoping to pay it off in 4 for that interest rebate.

To be on the safe side, I'm just hoarding cash for that purpose, knowing that my monthly payments won't change or get pushed back from early payments.

brilliant. if you come just short, let me know if youd like to make a deal.

this could be the start of johanns refi business right before the FR interest clawback expires.

If you're just putting that money in a savings account while you wait to accumulate enough for the payoff, though, aren't you losing out in the % return game?

I'm slowly accumulating money into an account earning 1% interest that at the end of the next 3 years need only be 92k to pay off my debt in the 48 month interest rebate period. so it's basically a dual extra emergency fund or pay off loans fund

alternatively rather than save the money I could pay extra on the loans as I go at their 3.75% rate, to be within the 48 month rebate period

But that savings on interest is not really worth losing that cash in the emergency fund to see where I am in 3 years financially and possibly change my mind on early repayment. I'll still be maxing out my 401k. if at some point during the next 3 years circumstances change for the better or worse, then I will of course re-evaluate

[SmokeytheBear]

I'm on the 10 year but hoping to pay it off in 4 for that interest rebate.

To be on the safe side, I'm just hoarding cash for that purpose, knowing that my monthly payments won't change or get pushed back from early payments.

brilliant. if you come just short, let me know if youd like to make a deal.

this could be the start of johanns refi business right before the FR interest clawback expires.

If you're just putting that money in a savings account while you wait to accumulate enough for the payoff, though, aren't you losing out in the % return game?

I'm slowly accumulating money into an account earning 1% interest that at the end of the next 3 years need only be 92k to pay off my debt in the 48 month interest rebate period. so it's basically a dual extra emergency fund or pay off loans fund

alternatively rather than save the money I could pay extra on the loans as I go at their 3.75% rate, to be within the 48 month rebate period

But that savings on interest is not really worth losing that cash in the emergency fund to see where I am in 3 years financially and possibly change my mind on early repayment. I'll still be maxing out my 401k. if at some point during the next 3 years circumstances change for the better or worse, then I will of course re-evaluate

I've resolved to do something similar starting this month.

The max I can get off the 48 month rebate is $2600; I don't want to pay any more interest than that. So I did the math to figure out how much more I need to pay in principal each month over the next year-ish (with any excess income going to savings), how much I need to put toward principal from my bonus, and how much I need to take from savings to cover a balloon payment at that magical date where I will pay the exact amount in interest that I can get back from FR on the 2% rebate.

I get to generate an emergency fund and I get to pay off the loan without having paid any interest (aside from time value of money).

[LaLiLuLeLo]

I'm aggressively saving cash in my FRB account to be debt free and get the rebate. I nabbed one of the 1.75% 5 years. But let me tell you, paying $5200/mo (or at least socking it away where I don't touch it) fucking sucks.

[bk1]

I'm aggressively saving cash in my FRB account to be debt free and get the rebate. I nabbed one of the 1.75% 5 years. But let me tell you, paying $5200/mo (or at least socking it away where I don't touch it) fucking sucks.

Could get a bit better return if you saved it in a 1% savings account instead FRB's middling rate.

[LaLiLuLeLo]

I'm aggressively saving cash in my FRB account to be debt free and get the rebate. I nabbed one of the 1.75% 5 years. But let me tell you, paying $5200/mo (or at least socking it away where I don't touch it) fucking sucks.

Could get a bit better return if you saved it in a 1% savings account instead FRB's middling rate.

True, I've been meaning to open one.

[JenDarby]

I'm aggressively saving cash in my FRB account to be debt free and get the rebate. I nabbed one of the 1.75% 5 years. But let me tell you, paying $5200/mo (or at least socking it away where I don't touch it) fucking sucks.

Could get a bit better return if you saved it in a 1% savings account instead FRB's middling rate.

True, I've been meaning to open one.

Ally is probably still your best bet, Discover and Capital one are competitive too.

It takes 5 minutes, do it right now!

[spyke123]

FRB folks, are there any conditions to that interest rebate except full payment in 48 months?

[Anonymous User]

So I am way behind on financial literacy, but I am a prime candidate for refinancing, right? Graduating in May with 100k debt at roughly 6% interest.

Also, do people usually do refinancing post-grad? Or do they do this while still in school?

[Johann]

So I am way behind on financial literacy, but I am a prime candidate for refinancing, right? Graduating in May with 100k debt at roughly 6% interest.

Also, do people usually do refinancing post-grad? Or do they do this while still in school?

Assuming big law, yes. If pslf eligible, prolly not.

[Anonymous User]

So I am way behind on financial literacy, but I am a prime candidate for refinancing, right? Graduating in May with 100k debt at roughly 6% interest.

Also, do people usually do refinancing post-grad? Or do they do this while still in school?

Assuming big law, yes. If pslf eligible, prolly not.

Thanks -- and is it usually post graduation? Or can I refi now?

[SmokeytheBear]

So I am way behind on financial literacy, but I am a prime candidate for refinancing, right? Graduating in May with 100k debt at roughly 6% interest.

Also, do people usually do refinancing post-grad? Or do they do this while still in school?

Assuming big law, yes. If pslf eligible, prolly not.

Thanks -- and is it usually post graduation? Or can I refi now?

You can do it whenever you want, but it depends who you refi with.

[Anonymous User]

Salary: 180k + wife's 55k

We will have to file separately for her to take advantage of teacher loan forgiveness.

Law school debt $200k + wife's private loans $60k = $260k total debt

Should I refi (private loans + law school) or get on REPAYE for the law school loans?

[Anonymous User]

Salary: 180k + wife's 55k

We will have to file separately for her to take advantage of teacher loan forgiveness.

Law school debt $200k + wife's private loans $60k = $260k total debt

Should I refi (private loans + law school) or get on REPAYE for the law school loans?

I was in a very similar situation and went the refi route. But are you at 180k like just starting right now, or about to be a second year? I waited almost a year to refi when I realized I would be at a firm for at least 4-5 years. I am not sure where the break even point is, but if you see yourself being there a while (and you aren't just starting next month), refinancing may be the best route. Has anyone actually done the breakdown of how long you need to stay in biglaw for refi to be best route? I am sure it also depends on how much you make at job #2.

[Anonymous User]

Salary: 180k + wife's 55k

We will have to file separately for her to take advantage of teacher loan forgiveness.

Law school debt $200k + wife's private loans $60k = $260k total debt

Should I refi (private loans + law school) or get on REPAYE for the law school loans?

I was in a very similar situation and went the refi route. But are you at 180k like just starting right now, or about to be a second year? I waited almost a year to refi when I realized I would be at a firm for at least 4-5 years. I am not sure where the break even point is, but if you see yourself being there a while (and you aren't just starting next month), refinancing may be the best route. Has anyone actually done the breakdown of how long you need to stay in biglaw for refi to be best route? I am sure it also depends on how much you make at job #2.

Still a 3L - trying to figure out this mess ahead of time. I see myself being at the firm at least 4-5 years (hopefully), but I'm scared of refinancing and then getting fired.

[SmokeytheBear]

Salary: 180k + wife's 55k

We will have to file separately for her to take advantage of teacher loan forgiveness.

Law school debt $200k + wife's private loans $60k = $260k total debt

Should I refi (private loans + law school) or get on REPAYE for the law school loans?

I was in a very similar situation and went the refi route. But are you at 180k like just starting right now, or about to be a second year? I waited almost a year to refi when I realized I would be at a firm for at least 4-5 years. I am not sure where the break even point is, but if you see yourself being there a while (and you aren't just starting next month), refinancing may be the best route. Has anyone actually done the breakdown of how long you need to stay in biglaw for refi to be best route? I am sure it also depends on how much you make at job #2.

Still a 3L - trying to figure out this mess ahead of time. I see myself being at the firm at least 4-5 years (hopefully), but I'm scared of refinancing and then getting fired.

one way to get around this (especially if you refi with FR) is to (i) set your monthly budget, (2) make the minimum monthly payments each month (3) put excess income into savings for safe keeping, then (4) make a balloon payment at the right time to get the FR 48 month bonus and pay little to no total interest.

[Anonymous User]

Salary: 180k + wife's 55k

We will have to file separately for her to take advantage of teacher loan forgiveness.

Law school debt $200k + wife's private loans $60k = $260k total debt

Should I refi (private loans + law school) or get on REPAYE for the law school loans?

I was in a very similar situation and went the refi route. But are you at 180k like just starting right now, or about to be a second year? I waited almost a year to refi when I realized I would be at a firm for at least 4-5 years. I am not sure where the break even point is, but if you see yourself being there a while (and you aren't just starting next month), refinancing may be the best route. Has anyone actually done the breakdown of how long you need to stay in biglaw for refi to be best route? I am sure it also depends on how much you make at job #2.

Still a 3L - trying to figure out this mess ahead of time. I see myself being at the firm at least 4-5 years (hopefully), but I'm scared of refinancing and then getting fired.

one way to get around this (especially if you refi with FR) is to (i) set your monthly budget, (2) make the minimum monthly payments each month (3) put excess income into savings for safe keeping, then (4) make a balloon payment at the right time to get the FR 48 month bonus and pay little to no total interest.

What is the FR 48 month bonus?

[SmokeytheBear]

Salary: 180k + wife's 55k

We will have to file separately for her to take advantage of teacher loan forgiveness.

Law school debt $200k + wife's private loans $60k = $260k total debt

Should I refi (private loans + law school) or get on REPAYE for the law school loans?

I was in a very similar situation and went the refi route. But are you at 180k like just starting right now, or about to be a second year? I waited almost a year to refi when I realized I would be at a firm for at least 4-5 years. I am not sure where the break even point is, but if you see yourself being there a while (and you aren't just starting next month), refinancing may be the best route. Has anyone actually done the breakdown of how long you need to stay in biglaw for refi to be best route? I am sure it also depends on how much you make at job #2.

Still a 3L - trying to figure out this mess ahead of time. I see myself being at the firm at least 4-5 years (hopefully), but I'm scared of refinancing and then getting fired.

one way to get around this (especially if you refi with FR) is to (i) set your monthly budget, (2) make the minimum monthly payments each month (3) put excess income into savings for safe keeping, then (4) make a balloon payment at the right time to get the FR 48 month bonus and pay little to no total interest.

What is the FR 48 month bonus?

Basically that if you refi your loans with First Republic (which you can only do if you meet certain eligibility requirements (e.g. income, size of loan, credit score, some liquidity, and you live in one of their areas (which, by the way, from what has been said on here, basically all you need is to live in one of those areas, work in big law, and have at least 60k in debt))), if you repay the balance of your loans within 48 months, they will reimburse you for all interest paid up to 2% of your initial loan balance.

PM me if you want more info and my bankers name (he's a nice dude). If I refer you, you get a $200 bonus and I get $300. win win.

[Anonymous User]

After a year on the job, I have paid about 22k in loans, have 7k net in my account (after discounting CC debt), have about 8k in retirement. Hows that for sucking at managing money? I don't even know where I spent the other 25k (after discounting rent and car payment)...

[SmokeytheBear]

After a year on the job, I have paid about 22k in loans, have 7k net in my account (after discounting CC debt), have about 8k in retirement. Hows that for sucking at managing money? I don't even know where I spent the other 25k (after discounting rent and car payment)...

Budgeting is so, so important. I have a pretty strict budget that I try to live by.

Try is the operative word. I blow it by about 10%-25% each month, but if I didn't have some benchmark to hold myself to, I'd blow it by more. And the guilt of blowing it makes me want to try to be good the next month, which is why I just haven't increased my budget by 25%.

[Anonymous User]

Salary: 180k + wife's 55k

We will have to file separately for her to take advantage of teacher loan forgiveness.

Law school debt $200k + wife's private loans $60k = $260k total debt

Should I refi (private loans + law school) or get on REPAYE for the law school loans?

I was in a very similar situation and went the refi route. But are you at 180k like just starting right now, or about to be a second year? I waited almost a year to refi when I realized I would be at a firm for at least 4-5 years. I am not sure where the break even point is, but if you see yourself being there a while (and you aren't just starting next month), refinancing may be the best route. Has anyone actually done the breakdown of how long you need to stay in biglaw for refi to be best route? I am sure it also depends on how much you make at job #2.

Still a 3L - trying to figure out this mess ahead of time. I see myself being at the firm at least 4-5 years (hopefully), but I'm scared of refinancing and then getting fired.

one way to get around this (especially if you refi with FR) is to (i) set your monthly budget, (2) make the minimum monthly payments each month (3) put excess income into savings for safe keeping, then (4) make a balloon payment at the right time to get the FR 48 month bonus and pay little to no total interest.

What is the FR 48 month bonus?

Basically that if you refi your loans with First Republic (which you can only do if you meet certain eligibility requirements (e.g. income, size of loan, credit score, some liquidity, and you live in one of their areas (which, by the way, from what has been said on here, basically all you need is to live in one of those areas, work in big law, and have at least 60k in debt))), if you repay the balance of your loans within 48 months, they will reimburse you for all interest paid up to 2% of your initial loan balance.

PM me if you want more info and my bankers name (he's a nice dude). If I refer you, you get a $200 bonus and I get $300. win win.

So you are suggesting going in with a plan of paying off $200k in student debt in 2 years? That would be an INSANE monthly payment. I honestly don't know if it's possible with his wife salary.

[SmokeytheBear]

Salary: 180k + wife's 55k

We will have to file separately for her to take advantage of teacher loan forgiveness.

Law school debt $200k + wife's private loans $60k = $260k total debt

Should I refi (private loans + law school) or get on REPAYE for the law school loans?

I was in a very similar situation and went the refi route. But are you at 180k like just starting right now, or about to be a second year? I waited almost a year to refi when I realized I would be at a firm for at least 4-5 years. I am not sure where the break even point is, but if you see yourself being there a while (and you aren't just starting next month), refinancing may be the best route. Has anyone actually done the breakdown of how long you need to stay in biglaw for refi to be best route? I am sure it also depends on how much you make at job #2.

Still a 3L - trying to figure out this mess ahead of time. I see myself being at the firm at least 4-5 years (hopefully), but I'm scared of refinancing and then getting fired.

one way to get around this (especially if you refi with FR) is to (i) set your monthly budget, (2) make the minimum monthly payments each month (3) put excess income into savings for safe keeping, then (4) make a balloon payment at the right time to get the FR 48 month bonus and pay little to no total interest.

What is the FR 48 month bonus?

Basically that if you refi your loans with First Republic (which you can only do if you meet certain eligibility requirements (e.g. income, size of loan, credit score, some liquidity, and you live in one of their areas (which, by the way, from what has been said on here, basically all you need is to live in one of those areas, work in big law, and have at least 60k in debt))), if you repay the balance of your loans within 48 months, they will reimburse you for all interest paid up to 2% of your initial loan balance.

PM me if you want more info and my bankers name (he's a nice dude). If I refer you, you get a $200 bonus and I get $300. win win.

So you are suggesting going in with a plan of paying off $200k in student debt in 2 years? That would be an INSANE monthly payment. I honestly don't know if it's possible with his wife salary.

Oh goodness no. I started off around 200 as well, paid some off for a bit, but only refinanced 120 or so. I have some debt that I did not refinance because I've had it since college and it's at somewhere between 1.5 and 3%.