Obama expected to promise student loan relief (Student Loan Debt discussion)

[Salodin]

There is always a way to make it in your favor though.

For instance, you can secure the loan against another asset which reduces the exposure of the bank, which makes them more likely to lower the rate.

My private loans are secured against my 401(k). If I default on the loan, they can go after my retirement. Then again if I default on the loan, I got bigger problems than my retirement.

Another option is to secure it against a cash CD. I bought a car that way when I didn't have any credit. Put up 20k into a CD, then got a loan against it for the car, then paid the car off two years early. The CD had a 4.5% rate and the loan had a 4.75% rate. Means I got a car loan for .25% annually when I had no credit.

There is always a cheaper way to get money, you just gotta be resourceful. 6.8% for an unsecured loan from the government is actually pretty good. But getting secured loans is always better (from a % perspective).

So you say there's better options privately, and cite using your 401k to secure a better rate.

This guy...lol.

[Buffy]

So you say there's better options privately, and cite using your 401k to secure a better rate.

This guy...lol.

Not sure I understand the lol? I simply secured the loan against an asset was my point. Something that many people can do.

[archibaldcrane]

Most people entering college don't have 20k+ in personal asests to secure a loan with.

[Clash Perez]

P'sure that suggesting that a typical college student should just leverage his/her assets for better loan options is why you're getting lols.

It's simply not the reality for the great majority of those entering college for the first time.

edit: d'oh, beaten.

[archibaldcrane]

A friend of mine, right after grad school with like 100k in debt, took out a bunch of credit cards, cash advanced all of them (this is back when they gave 15k credit lines to anyone) paid off his federal loans and then immediately declared bankruptcy to discharge his CC debt lol.

[Buffy]

Yah, most college student don't, I felt like the course of the conversation had steered to graduate and post graduate degrees over the last page or two, which means people are older. That was more what I was speaking to.

And Archi, your friend is a little ethically......................................... .............bankrupt.

[Thiefami]

lmfao at that tweet. I'm in tears

[Quicklet]

A friend of mine, right after grad school with like 100k in debt, took out a bunch of credit cards, cash advanced all of them (this is back when they gave 15k credit lines to anyone) paid off his federal loans and then immediately declared bankruptcy to discharge his CC debt lol.

That actually sounds pretty awesome if he didn't need to buy a house in 7 years, although I've heard people who've gone through bankruptcy actually can get some awesome deals on securing credit because the lenders know they won't be able to declare bankruptcy again for a long period of time.

[hey]

A friend of mine, right after grad school with like 100k in debt, took out a bunch of credit cards, cash advanced all of them (this is back when they gave 15k credit lines to anyone) paid off his federal loans and then immediately declared bankruptcy to discharge his CC debt lol.

I thought everyone used to do this?

There is always a way to make it in your favor though.

For instance, you can secure the loan against another asset which reduces the exposure of the bank, which makes them more likely to lower the rate.

My private loans are secured against my 401(k). If I default on the loan, they can go after my retirement. Then again if I default on the loan, I got bigger problems than my retirement.

Another option is to secure it against a cash CD. I bought a car that way when I didn't have any credit. Put up 20k into a CD, then got a loan against it for the car, then paid the car off two years early. The CD had a 4.5% rate and the loan had a 4.75% rate. Means I got a car loan for .25% annually when I had no credit.

There is always a cheaper way to get money, you just gotta be resourceful. 6.8% for an unsecured loan from the government is actually pretty good. But getting secured loans is always better (from a % perspective).

What a fucking joke. I don't even know anyone who started college with any assets other than a car and maybe a few thousand at most in savings.

[Restrat]

[email protected]% CD

[kuronosan]

Just thought I'd check back into this topic.

The capping loans at 10% of your discretionary income only applies to new loans taken out after July 1st of this year (source: studentloans.gov).

Doesn't do shit for existing students or loans.

[Meresgi]

Also heard the interest rate is going to go up again on the radio, not sure if that's true or not.

[Quicklet]

It's true.

http://www.vox.com/2014/7/2/5864727/...s-ok-with-that

When they re-authorized this a while back this was set in motion. I believe there are caps on federal student loan interest rates but they're stupidly high compared to historical records, somewhere up around 8-10%, and tying them to market rates all but assures we'll inch closer to those numbers.

After the housing bubble burst and the financial credit crisis of the past decade, you would think everyone would have learned their lesson by now. When the student loan bubble inevitably bursts people will point to this and go "we should have seen it coming." Unless the economy miraculously roars back before the next major recession, it's going to make Occupy look like a picnic.

[kuronosan]

It's true.

http://www.vox.com/2014/7/2/5864727/...s-ok-with-that

When they re-authorized this a while back this was set in motion. I believe there are caps on federal student loan interest rates but they're stupidly high compared to historical records, somewhere up around 8-10%, and tying them to market rates all but assures we'll inch closer to those numbers.

After the housing bubble burst and the financial credit crisis of the past decade, you would think everyone would have learned their lesson by now. When the student loan bubble inevitably bursts people will point to this and go "we should have seen it coming." Unless the economy miraculously roars back before the next major recession, it's going to make Occupy look like a picnic.

It'll make OWS look like a fast food drive thru snack.

[archibaldcrane]

How is it going to burst? It's not like all these students can default or something.

[Quicklet]

Not sure if sarcasm, but regardless, you might not even need a large scale uptick in defaults for it to have a ripple effect on the housing and auto markets.