Casa Adalia

April, 2017Archive for

No one has responded yet, not sure why, but I thought I’d give my thoughts

Wednesday, April 26th, 2017

It seems to me that this swap the loan thing is really just that, swapping one debt for another. It reminded me of DR talking about paying off one cc with a lower interest cc or a 0% interest. He said it amounted to shuffling or swapping around debt, almost like the old ponzi scheme. No, I am not saying your dd is looking at a ponzi scheme but it has that aroma because it is swapping debt.

Is she not in a place financially to simply accelerate payments on the current debt w/o penalty?

If she does take on this new debt will you have to co-sign? If you have to co-sign for her then I’d have to fall back on DR’s advice about never co-signing for anyone’s debt.

If she does this I’d tell her to be care of fees and stuff that would get rolled into the new debt and she would end up owing more. Would she be able to make accelerated payments to the new debt w/o penalty?

Question about student loan payoffs

Friday, April 7th, 2017

DD22 has an opportunity to swap out her student loan debt. Basically, she can get a $25000 loan at 2.9% 5 years, and pay off her 20,600 7.9% 10 yr student loan. Of course, this doubles her monthly payment from $250 to $450.
The next question is: She has varying amounts of other student loans. She could swap/pay 1 other of the following 3 entirely: 4.5%, 5.6%, 6.0%. If she chose the 5.6 or 6.0, there’s enough to pay 1 of them entirely, and cut the other down by half. The monthly payments for those 3 are 45.52, 38.16, 38.16 respectively. She could probably pay the remaining balance on 5.6 or 6.0 within 6 months if she doubled down.
At best, she would be exchanging 287.71 in monthly payments for 10 years for $450 in monthly payments over 5 years, so it would “cost” her an additional $162 a month compared to if she left it the way it is.
On the other hand, she would “save” about 8,487 in interest, which is enough to pay off another of her student loans.
So the question is: does she swap out as many higher interest loans as she can and exchange them for a much lower interest rate even though it will jump her payments? Or leave it the way it is?