Student loans

[ertyu]

You know what's the best type of way to go through college? Get scholarships, I make $2400 a year going to college because my scholarship money > tuition cost

Go me. :D

[evilbau]

It's possible to get through school w/o any debt too >.>

I don't care if you have rich parents

how presumptuous lol i also had no debt and no rich parents. I still know about student loans though. Even if you work your way through school if you are eligible for certain types of loans its stupid not to take them. Provided you can be responsible with it (sad that I even have to mention it) you can make money off it even in the most conservative of investments and it can be the start of your fortune with little risk.

If you actually need it for school, well a real education is worth the money spent most times. (And by that I mean simply showing up and passing is not an eduction)

[Zigma]

Consider me lucky but I am 22 years old and and make roughly $40,000 a year working IT. I have 5 credit cards and one charge card with no preset limit, racking in a total of about $20,000 worth of credit freely for me to use. I am not in debt and I've never gone to college because I consider it a waste of time if you're talented when it comes to computers.

yet if you lived in california with those credentials unless you were sucking the bosses dick, you'd maybe get lucky with an entry level position and making maybe 25k a year. and all honesty, 40k a year is not much, bout the bare minimum to live comfortably in the SF Bay area.

It's not like I didn't do any schooling, I went to trade schools which were about 3-6 months each to get certifications and I'm going to go for more at the end of this year. When you get certified, you fall into a pay category on what you should be getting paid and it is a lot higher than 25k/year lol. I agree 40k isn't much but it also depends on the cost of living.

Is the SF bay area like NYC? I would assume so.

[finale23]

Consider me lucky but I am 22 years old and and make roughly $40,000 a year working IT. I have 5 credit cards and one charge card with no preset limit, racking in a total of about $20,000 worth of credit freely for me to use. I am not in debt and I've never gone to college because I consider it a waste of time if you're talented when it comes to computers.

yet if you lived in california with those credentials unless you were sucking the bosses dick, you'd maybe get lucky with an entry level position and making maybe 25k a year. and all honesty, 40k a year is not much, bout the bare minimum to live comfortably in the SF Bay area.

It's not like I didn't do any schooling, I went to trade schools which were about 3-6 months each to get certifications and I'm going to go for more at the end of this year. When you get certified, you fall into a pay category on what you should be getting paid and it is a lot higher than 25k/year lol. I agree 40k isn't much but it also depends on the cost of living.

Is the SF bay area like NYC? I would assume so.

you can live on $40,000 in nyc? i just quit my first job and went back to grad school because i was making 47k and taking home about 32k after all the taxes, med/car insurance, and benefits. i did manage to save about 4k after paying off all student/car loans, but it was hardly enough.

[Norelco]

I go thru Citibank student loans http://www.studentloan.com and my interest rate is 5.375% ... got about $11k left to pay off. I consolidated so I'm really only paying $100 a month. I'll probably start chipping away at that soon.

[divisortheory]

It's possible to get through school w/o any debt too >.>

I don't care if you have rich parents

Your state doesn't have it's version of the HOPE scholarship? That sucks

Well if you want to play it like that, it's POSSIBLE to get through school on any number of scholarships, and then go to graduate school on a fulbright or rhodes scholarship. But it's not really that common and it's not an option to a lot of people. Furthermore, it doesn't pay living expenses, which can be a hefty sum especially if you're attending a university away from home. Quite frankly, I'd rather have $100k of student loans and a degree from MIT than no student loans and a degree from Georgia State.

[Melena]

Consider me lucky but I am 22 years old and and make roughly $40,000 a year working IT. I have 5 credit cards and one charge card with no preset limit, racking in a total of about $20,000 worth of credit freely for me to use. I am not in debt and I've never gone to college because I consider it a waste of time if you're talented when it comes to computers.

yet if you lived in california with those credentials unless you were sucking the bosses dick, you'd maybe get lucky with an entry level position and making maybe 25k a year. and all honesty, 40k a year is not much, bout the bare minimum to live comfortably in the SF Bay area.

It's not like I didn't do any schooling, I went to trade schools which were about 3-6 months each to get certifications and I'm going to go for more at the end of this year. When you get certified, you fall into a pay category on what you should be getting paid and it is a lot higher than 25k/year lol. I agree 40k isn't much but it also depends on the cost of living.

Is the SF bay area like NYC? I would assume so.

Those credentials are still just a dime a dozen out here. Right now for i'd say most tech jobs they are requiring a minimum of Cisco, A+, and Net + certification, with some going as far as also requiring an MCSE. And the companies know it's dime a dozen and are paying shit. There was a job listing for just a basic call center job and they were requiring a bachelors to work for 13 bucks an hour. Out in the mid west and east coast you can slack a bit on your credentials and still get in just cause you don't have 300+ people all going for the same job.

[Norelco]

5 credit cards thats not good for your credit. you should only have at most 2. and only use 33% of your credit line to optimize your credit score.


on topic: I used the stafford federal direct student loans. They were the best option since everywhere else wanted a co-signer and I didn't have anyone to do it. They gave me part of it subsidized becuase I met financial criteria for the interest free portion and I have some unsubsidized. I only take out what I need for tuition a books. And I pay off the quarterly interest while paying $20~ a week through their online payment source. they give me a 6 month grace period after graduation (or if I don't register a semester) before repayment with a ten year plan $50 a month minimum though my repayment plan chages per semester. I can extend that depending on my ability to repay.

the bit about the credit cards is rubbish (Find out how your FICO score is calculated), but the info on student loans was good.

How is it rubbish? Are you saying that EquiFax and other companies that calculate your credit score are lying when they say the more credit cards you have active the lower your credit rating?

Nevermind, found the answer here: http://articles.moneycentral.msn.com/Ba ... oMany.aspx

[simozene]

I took out SallieMae student loans each year during my 4 years of college. At the end of my Junior year, the interest rates started to rise, so I consolidated my first 3 years of loans at a low rate of 2.5%. Then after my senior year I consolidated that particular loan at the current rate of 5.125%, which still isn't that bad of an interest rate.

One thing to keep in mind is that you would want to pay off these loans as slowly as possible. The interest is tax-deductible so you're better off saving your extra money in some mutual funds or savings accounts rather than paying off your student loan balance.

[Skyylya]

Pay it off as slowly as possible?

I might be missing something but paying it off as slowly as possible isn't always the best thing.

I don't know everyones best situation, but my students loans that I owe right now are about 29k after 4 years of school, not to bad at all. If i paid them off as slowly as possible over the full course of the payoff it'll end up costing me over 52k after adding the interest, which is a decent 5.25ish%. Sure it's possible with the right investments to make that kinda money over 10-15-20 years or whatever your payoff happens to be, but in my case i'd be paying almost double what my loans were if i did the minimum payment. My goal is to pay it off as soon as possible so as to not pay all that interest. if i could get away with paying only 35-40k i'd consider myself lucky.

[divisortheory]

in my case i'd be paying almost double what my loans were if i did the minimum payment.

Doesn't matter. What matters is that if you are paying x dollars per month to pay off a loan with a certain interest rate P, when some of that x dollars could be earning MORE than P% interest in another account, you're better off reducing x and diverting the rest of the money to the other account to earn higher interest.

[Norelco]

in my case i'd be paying almost double what my loans were if i did the minimum payment.

Doesn't matter. What matters is that if you are paying x dollars per month to pay off a loan with a certain interest rate P, when some of that x dollars could be earning MORE than P% interest in another account, you're better off reducing x and diverting the rest of the money to the other account to earn higher interest.

win

[archibaldcrane]

Pay it off as slowly as possible?

I might be missing something but paying it off as slowly as possible isn't always the best thing.

Not always, and since your interest rate is 5.25%, it's a wash for you basically. For those of us in the sub-3% range though, it's the best. If I could borrow 10 million dollars at my student loan interest rate, I could live off it for the rest of my life.

[evilbau]

5 credit cards thats not good for your credit. you should only have at most 2. and only use 33% of your credit line to optimize your credit score.


on topic: I used the stafford federal direct student loans. They were the best option since everywhere else wanted a co-signer and I didn't have anyone to do it. They gave me part of it subsidized becuase I met financial criteria for the interest free portion and I have some unsubsidized. I only take out what I need for tuition a books. And I pay off the quarterly interest while paying $20~ a week through their online payment source. they give me a 6 month grace period after graduation (or if I don't register a semester) before repayment with a ten year plan $50 a month minimum though my repayment plan chages per semester. I can extend that depending on my ability to repay.

the bit about the credit cards is rubbish (Find out how your FICO score is calculated), but the info on student loans was good.

How is it rubbish? Are you saying that EquiFax and other companies that calculate your credit score are lying when they say the more credit cards you have active the lower your credit rating?

Nevermind, found the answer here: http://articles.moneycentral.msn.com/Ba ... oMany.aspx

from the article :

Also, don't close your oldest accounts if you find a better card. "If you close a card you opened in college 10 years ago because you found a better card, creditors will penalize you, because they are looking for a lengthy and successful credit history," says Joyce Murray of Money Management Internal.

According to Experian, one of the three major credit reporting agencies, there's no right number of credit cards for everyone. It depends on how much you spend and how much you can pay off. However, what you can afford at present may change now that most credit cards are increasing their minimum payments.

in short, do not close credit cards unless you have a damn good reason for doing so (i.e. no longer want to do business with that company, it is a brand new card which you don't want, annual fee card that you can't get waived) as every card you have will contribute to your average age and history of repayment. If you have lots of cards, each new card will have diminishing impact on crucial factors which determine your score.

[Norelco]

Bah, all I know is I got a credit report recently and it was up there. So I'm not too worried.

[evilbau]

Bah, all I know is I got a credit report recently and it was up there. So I'm not too worried.

Not saying you should be worried, but it would benefit anyone to know how to maximize it and how to make your credit report as attractive as possible for that future mortgage. ^^ This is a credit-based society, good to know the rules of the game you are going to be playing for the rest of your life.

[divisortheory]

FICO score calculation is extremely complicated and what applies to one person doesn't necessarily apply to someone else. Having lots of credit cards can be either bad or good. It can be a sign that you're low risk, and even with so much available credit you're responsible about it and don't go overboard. But it can also be a sign that you're high risk, for example if you tend to use them frequently, or just have a lot of outstanding debt in general. Personally, I have one credit card with a limit of $7,500 and a balance of 0. I applied for a mortgage about 2 weeks ago and in the process found out that my FICO score is 803. It's not immediately obvious whether my score would have gone up or down with more credit cards. There was a time when I had 5 credit cards with a total outstanding balance of about $30,000. I paid them all off and closed all of them.

The number one thing you can do to increase your credit score is establish a long history of paying everything on time, and seeing your overall debt decrease steadily over time.

[Norelco]

Bah, all I know is I got a credit report recently and it was up there. So I'm not too worried.

Not saying you should be worried, but it would benefit anyone to know how to maximize it and how to make your credit report as attractive as possible for that future mortgage. ^^ This is a credit-based society, good to know the rules of the game you are going to be playing for the rest of your life.

Hehe, I know. That's actually how I found out my credit score, because my fiance and myself started looking for homes and went to the bank. Both our credit scores are good, but yes, there is room for improvement. Good tips on that website I found, I never considered closing out cards could be detrimental, but now I know.

[Remyo]

I only have 1 credit card also. It's only got a credit line of $250 but I scored big time because there is 0% interest on it if I pay the minimum payment blah blah in 25 days. plus I only use it for gas and online game fees so it'll work out well. I prefer to pay with my own money anyway, but I use it to help my credit score.

[evilbau]

True, the formula is complicated, but regardless of the details of how doing X will affect your points Y, people have pretty accurately pinpointed what causes changes in your score. You have a high score for a variety of reasons, but what if you had an emergency expense that cost 3k? Your utilization % would skyrocket and being your only credit card, you would take a significant hit to your score. You (the individual) may have savings to pay for it, but this was just an example. Having more credit could help in that instance. I am not advocating USING more credit, but take the time to figure it out.

That 803 FICO will not be as helpful as you think when it comes to a mortgage if your application gets reviewed by a person (increasingly possible with the tightening of underwriting practices). It shows you have been entrusted with 7.5k for a long time. It does not show responsibility of a high amount loan. You want to demonstrate as many things as possible with your credit report: Long history of on-time repayment, Long history of being entrusted with large amounts of money, Using aforementioned credit responsibly, Experience with dealing with credit (through many different accounts), Low debt liability, etc.

And your point about:

It's not immediately obvious whether my score would have gone up or down with more credit cards.

That is very true. I am talking long term scenarios and protecting/strengthening your credit report as much as I am about maximizing your FICO. In truth, your score will most likely go down with more cards (halving your average age, the added hard inquiry, etc.) but it will help your long-term credit prospects.

I admit I am a huge snob when it comes to personal finances and gaming the system so I'm trying to be as diplomatic as possible. I really encourage anyone who cares about their finances and credit future to read up on it.