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HonorableTB posted:So I did a dumb thing and traded it in, got $3000, put a $1500 lien on the new(er) car (2013 Corolla) and the Toyota dealership slapped me with a $13,000 loan at 24% INTEREST. I called USAA, they took over the loan for me, and negotiated a 4.5% interest loan but Toyota wouldn't let go of it unless they paid the entire amount + expected interest at once so that's how I ended up with a $19,000 car loan. I was stupid and got bent over on account of it. Can you explain the logic / thought process behind this? Why did you refinance your loan to a lower interest rate if you had to pay the total interest up front? Why would anyone advise you to do this? You turned a $13,000 loan into a $19,000 loan. I just can't even grasp why someone would think this was a good idea. Was this to lower the monthly payment or something? How big is your apartment? Is it a 1 bedroom 1 bath? If you have a 2 bedroom 1 bath or 2 bedroom 2 bath have you thought about getting a roommate? If you could split rent (plus utilties and other household expenses) with another person that could free up $300-$500 a month for you to throw at debt repayment.
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Jul 23, 2014 18:11
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HonorableTB posted:My thought process was: this loan is almost at 20% interest, I won't be able to ever pay it off with what I make unless I get to a lower interest rate. I traded $6000 for a 4.5% interest rate, which will allow me to actually make payments on principle as well as the interest. It wasn't the best idea, but it was the only way I could think of to make it work. This doesn't make any sense. Unless you somehow lowered your payment as part of the process all you did is effectively raise you interest. What was your payment before? How long was the loan for? What is your payment now? How long is the loan for? All I can think is that you lowered the monthly payment so you could afford to make it. Otherwise you have a very poor understanding of how loans work.
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Jul 23, 2014 19:23
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HonorableTB posted:My payment before was going to be over $400, now it's down to $308. Both over 6 years. This literally doesn't add up: $13,000 24% interest 72 months Expected payment $342.24 $19,000 4.5% interest 72 months Expected payment $301.60 http://www.cars.com/go/advice/financing/calc/loanCalc.jsp?mode=full It sounds like you literally have no idea what has happened to you. How much was the original loan for? How much had you paid off? Alternatively how many payments did you make? How much was the new loan for (original value)? How much have you paid off? Alternative how many payments have you made? I'm trying to understand what in the actual gently caress happened to you and this loan. You make it sound like you got "rushed into a decision" wherein you immediately went home and got yourself out of it. It didn't occur to you when you were signing the paperwork that you were getting screwed, but it did when you got home? Isn't there a 3 day clause built into these contracts where you can get out of them?
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Jul 23, 2014 22:25
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HonorableTB posted:The original loan was for $13,000 and some change. I don't have the exact numbers on hand. I hadn't paid anything on it before USAA took over the loan. I had a 90 day no-payments thing with the car. I got the car in March and I made the first payment on it in June, under the terms of the new loan from USAA. The new loan was for $19,000 and some change, to account for the interest from Toyota. I have made two payments on it at $308.02 so far. It just doesn't add up that a $13,000 loan at 24% interest have a payment over $400 unless they built in some other fees or something. Even if you eliminate 3 payments (no payments 90 days) the payment only equals $349 over the life of the loan.
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Jul 23, 2014 23:01
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HonorableTB posted:Then my original payment number was wrong. I don't know what the payments would have been on the original loan because I never made any of them. The only payments I've made were on the new loan from USAA. It looks like you're saving money. However as someone else already mentioned it must not have been 100% of the interest that would have been earned, but instead a very steep early payoff fee. As someone previously mentioned you should put together a quick excel sheet of your budget by category to see how much money you have left over. You don't seem to be in terrible shape. The car loan is unfortunate, but as has been previously mentioned there's nothing you can really do about it. I don't see that you have car insurance listed anywhere. How much are you paying for that? Also your June spending can't even be remotely correct because you claim to make $2750 and only list $1253 worth of expenses. Even if you toss in $700 of rent which you claim was excluded that only bumps you up to $1953 leaving an excess of $800. That's also assuming you didn't spend any money on your CCs.
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Jul 24, 2014 00:23
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HonorableTB posted:I didn't know that. I remember being told by both the insurance company and the dealership that I needed full coverage but I thought that was just a stipulation from the bank to protect their interest. I mean, it's still true, I just didn't carry the thought to its conclusion. Being so far under water on the loan you'll definitely want to have good insurance. Do you know if your insurance is covering the full amount of the loan or just the vehicles value? I would almost be afraid to drive that car around knowing that if I got in an accident I'd have no car and $9,000 in loan payments to continue making. I know you already mentioned you were going to tackle it this weekend, but it's extremely important that you take a good hard look at where you're spending your money. If you can meter your spending to be under $2,000 a month you could be debt free pretty easily in a few years. However it's a very common mistake (read most of the other advice threads on here) that people think they can just go cold turkey and stop spending habits overnight. You should look at prior month actual spending, set realistic goals where you reduce spending, and over the next year or so continue to look to reduce spending.
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Jul 24, 2014 15:14
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I Love Topanga posted:I think most policies (for loans) require it now. You should call whoever your insurer is or your broker and ask about your current coverage. If your car is that far underwater I'm almost certain it would be required. It wasn't required when I got a car loan a few years ago but we put 35% cash down.
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Jul 25, 2014 17:16
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Do you have Excel? I'm working on a budget for you.
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Aug 4, 2014 19:29
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FYI - Summarized spending for June with a reasonable budget. I don't have all the information from his June numbers. EDIT: It's off $5 because I had transport broken out until I realized he only spent $5. Bugamol fucked around with this message at 19:59 on Aug 4, 2014 |
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Aug 4, 2014 19:51
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Assuming very minimal lifestyle changes, my budget isn't exactly making you count your pennies, you could have your car easily paid off by the end of 2016. If you're willing to get aggressive with curbing your spending habits you could have it paid off sooner. At which point you could probably knock through your student loan debt by the end of 2019-2020 assuming you don't get any raises or bonuses.
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Aug 4, 2014 20:16
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On a side note the fact that you spent $275 on video games in one month (I know I know STEAM SALE!) is pretty loving scary. You spent $15 for a WoW Sub $60 for a character boost (I'm assuming you already bought the expansion in a previous month and used that boost) and then an additional $200 on steam games. The fact that you work full time means you absolutely do not have enough time to be playing this many games. You are clearly chasing some sort of entertainment high and it's not working.
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Aug 4, 2014 20:37
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HonorableTB posted:You're right, I don't have time to play all of those games. I bought the expansion and another boost on top of that so I could play with people from work on their server. I am not chasing some kind of entertainment high, I would just see something I thought was fun and buy it. A good bit of that money was spent on games for other people in the Steam gifting thread; I didn't spend all of that on myself. I'm confused. You needed two characters to play on your friends from work server? Also you could have leveled a character. It can be done relatively easily in a few weeks and it would probably prevent you from spending more money on games you won't play. Also don't tell me you're one of those "I only have fun at high level" people. EDIT: Since you're certain you won't spend above $25 going forward can we see your July spend to see how well you did? Bugamol fucked around with this message at 22:07 on Aug 4, 2014 |
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Aug 4, 2014 22:00
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When are you student loans coming due? Do you have any idea what the minimum payment is going to be? Are you on any sort of income based repayment plan? Not to be the bearer of bad news but you could be looking at a $400-$500+ a month student loan bill depending on what repayment option you're on. You should get your other poo poo in line while you have the extra cash flow. Also if your GF is going to demand the AC being cranked to 74 she should be paying 60-70% of the bill.
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Aug 4, 2014 23:13
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EDIT: /\/\/\/\/\/\ - He rents so a lot of those (aside from maybe changing the light bulbs aren't really practical aside from talking to his apartment complex) The easiest and most obvious answer here is just that your GF should be paying half the bill unless you guys have joint finances. I agree trying to have her pay more of the bill is probably a bad idea, but she should at least be paying her 50%. You're not really in a situation to be charitable.
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Aug 6, 2014 17:04
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HonorableTB posted:Since we're both keeping to a budget, we only go out when we have planned in advance for it. We went out to eat at a semi-nice restaurant on Friday but we'd both planned for it in advance and had money set aside. Everything you said sounds pretty great except for this line. This is a trap that a lot of people get stuck in when they first start "budgeting". Just because you "planned" for it or "set money aside" doesn't mean it should be in your budget. This doesn't mean you should live like a hermit, but you should be careful playing mental gymnastics to justify your poor spending habits. Also when is your student loan coming due and how much are the payments going to be?
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Aug 6, 2014 19:11
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Keep in mind as you continue to defer your loans you will continue to accrue interest. I believe the income based repayment plan allows loan forgiveness (based on some circumstances), but do you really want to be making a student loan payment for the next 25 years? Assuming $45,000 in student loans over 3 years of deferment: Start - $45,000 Year 1 - $45,000 + $2,475 interest Year 2 - $47,475 + $2,611 interest Year 3 - $50,086 + $2,754 interest End - $52,840 It will cost you ~$7,840 to defer your loans over 3 years. It will be more than this because I did not use compounding interest. You should probably try and pay at least the interest each month ~$206.25.
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Aug 11, 2014 16:42
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EugeneJ posted:Anyone on IBR is being converted to Pay as You Earn - it's only 20 years for repayment Ya I don't know all the rules. I'm not on IBR. I believe you have to have borrowed >$50,000 and there are other qualifications for the forgiveness. However as you make more money your payment is going to go up, but if you start only doing IBR and don't even pay the interest charges you could get yourself into a situation where 10-15 years from now you have a sizeable loan payment with no prospect of being able to pay it off. Also if you miss a payment I believe you lose out on IBR. There's more to it than pay your loan for 20 years and carries some risk. EDIT: I mean if you owed $150,000 + and it wasn't realistic that you could pay it off I could understand, but carrying $45,000 worth of debt for the next 20 years (which could equate to a $750-$1000 payment in 10-15 years) seems foolish to me. Bugamol fucked around with this message at 18:48 on Aug 11, 2014 |
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Aug 11, 2014 18:46
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spwrozek posted:Care to post some actual data on this? It's income based. Normally not to exceed 10%-15% take home. Eventually it's going to catch up to you if you just make the minimum payment. Probably at the 10-15 year mark where you will most likely have a $1,500+ student loan payment. Then you could get laid off, miss a payment, and disqualify yourself from the forgiveness. Plus as someone else said there's a lot of volatility with student loans. It's possible that in 5-10 years they'll just forgive everyone's student loan debt. Who knows. If I was in a situation where I could pretty easily be out of debt (without even making any real sacrifices) in just 3-5 years, and the alternative was to make payments on a loan for 20 years, I would just pay it off. Zhentar posted:This year, he's way better off paying 3.85% potentially tax deductible interest than the interest on any of his other loans. Next year, his minimum payment will probably be around $200-$250, from what I can tell about IBR payment calculation, making it a moot point. You have to pay the interest for it to be tax deductible. Which is why I recommended he at least make an interest payment each month.
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Aug 11, 2014 23:24
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| # ¿ Apr 27, 2024 13:46 |
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Ya I didn't mean to quote you. Not sure what happened and how I didn't notice. I agree. For 70% of the population who don't have $150,000+ in student loans to be a teacher in South Carolina IBR is going to result in you paying off the loan eventually. It really only benefits people who made really really stupid decisions in college.
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Aug 11, 2014 23:51
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