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Dr. Eldarion posted:Why the hell is "I'm $200,000 in debt" in these posts always followed soon after by "I'd like to buy a home soon". Dude, that's not a priority at the moment. Because a shocking number of people think that debt and home ownership are the keys to living a middle class lifestyle.
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Oct 27, 2014 16:14
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tentish klown posted:Interestingly, in the UK the student loan is probably the best loan you can possibly get. Interest rate is the base rate + 1%, capped at RPI (inflation), so currently 1.5%. Repayments are set at 9% of your income above £16,910. Easy. If your student loan is backed by the government then interest rates aren't too bad in the U.S. either. Even private loans (of which I have two) aren't bad interest wise. The problem with student loan debt is borrowing too much and deferring for too long. There was a story on NPR last year about a guy who borrowed around 20k that's now over 100k because he kept deferring the payments. I think he's obligated to pay $1000 a month for the next 30 years to pay off the loan (final cost with interest will be close to 400k). MickeyFinn posted:Because a shocking number of people think that debt and home ownership are the keys to living a middle class lifestyle. Depending on your income, not getting that mortgage interest deduction can really hurt. Not saying these people should take on the obligation and higher costs of maintenance associated with home ownership, just that it can look like a good financial deal on paper. Krispy Wafer fucked around with this message at 17:48 on Oct 27, 2014 |
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Oct 27, 2014 17:43
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In gambling there's a concept called the Threshold of Pain. Once you lose more than you find comfortable, you'll easily lose 5x as much. I know this certainly contributed to the time I got way over my head. I'm already paying xxx a month servicing debt and I don't have everything I want. What's xxx+1?
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Oct 27, 2014 18:30
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Krispy Kareem posted:If your student loan is backed by the government then interest rates aren't too bad in the U.S. either. Even private loans (of which I have two) aren't bad interest wise. With private student loans you are hosed because the interest rates tend to be higher and they don't offer deferments or any kind of relief that helps you whatsoever. No discharge in bankruptcy for you in any of these cases either!
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Oct 27, 2014 19:04
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Breetai posted:His bright idea for how to get out of the hole was to deliberately take on 6k of credit card debt Maybe the interest rate was lower. Hey, that'd be a good way to get out of student loans.
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Oct 27, 2014 19:05
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Dr. Eldarion posted:Why the hell is "I'm $200,000 in debt" in these posts always followed soon after by "I'd like to buy a home soon". Dude, that's not a priority at the moment. Well they're brought up on the idea that building up a credit rating is a good idea. The only way to do that is be $200k underwater. Perhaps they even think they'll qualify for a sub-prime loan with no deposit and no chance of paying the mortgage, because that worked out so well.
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Oct 27, 2014 19:34
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seacat posted:I think you've got the terms mixed up ... in the US, during deferment period the gov't pays the interest accrued, so a balance of 20K will stay 20K after deferment. In a forbearance you arn't required to make payments but interest accrues and is capitalized at the end of the forbearance so that is what you want to avoid. Although with the guy in question, he probably was in forbearance just because deferrment requires specific circumstances. Haifisch fucked around with this message at 19:50 on Oct 27, 2014 |
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Oct 27, 2014 19:47
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seacat posted:I think you've got the terms mixed up ... in the US, during deferment period the gov't pays the interest accrued, so a balance of 20K will stay 20K after deferment. In a forbearance you arn't required to make payments but interest accrues and is capitalized at the end of the forbearance so that is what you want to avoid. Okay, I did not know that. Then I was referring to forbearance. Kids, don't forbear your student loans.
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Oct 27, 2014 19:48
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I have a bunch of un-subsidized loans because I was working full time before I went to college and students like that get 1 full year of the shaft from FAFSA calculations. You get double hosed because those loans accrue interest for the next 3-4 years while you're in school. They're the highest balance, highest interest rate loans that I have.  I hate them, and my student loan company makes it very difficult to pay on just that one loan account as well. They screw it up every time I do it and I have to call. Don't be poor and don't take unsub loans if you can help it (but they're still way better than private!).
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Oct 27, 2014 20:39
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Haifisch posted:There are multiple types of federal loans. There are direct subsidized loans(which work as you say, but require you to demonstrate financial need), and direct unsubsidized loans(which do accrue interest during deferment, with the school determining how much you can borrow). Sorry you're right. I'm lucky that I only had subsidized loans so I forgot unsubs are worse during deferment (but still not as shittacular as pretty much any private loan).
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Oct 27, 2014 20:41
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tentish klown posted:Interestingly, in the UK the student loan is probably the best loan you can possibly get. Interest rate is the base rate + 1%, capped at RPI (inflation), so currently 1.5%. Repayments are set at 9% of your income above £16,910. Easy. lostleaf posted:That's something I would do though for a different reason. Because mortgage debt is can be discharged in bankruptcy while educational debt can not. If the rates are comparable, I would prefer to take on mortgage debt. If I get into financial difficulties, I would be free and clear in 7 years if I declare bankruptcy.  land. You'll lose everything, and the bankruptcy process is a lengthy one.And let's be honest- restructuring your finances so you can facilitate bankruptcy in the near future epitomizes "bad with money". melon cat fucked around with this message at 22:53 on Oct 27, 2014 |
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Oct 27, 2014 20:47
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Dik Hz posted:We just recently purchased a new (to us) car and went with the max-term 75-month loan because the interest rate was significantly lower than our mortgage. Just out of morbid curiosity what rate did you get on your 6+ year loan?
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Oct 27, 2014 21:32
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You forgot to mention with UK student loans they are also forgiven after 40 years. The only people who have it better are the Scottish. Free uni there.
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Oct 27, 2014 21:55
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Me: Remember, rent is due next week. Bad-with-money roommate: That's fine! I have five thousand in the bank so I'm still flush. For those who are new to the thread, he's referring to cashing out his 401k. Meanwhile, another oversized mug and $100 in DVDs arrived in the mail from Amazon.
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Oct 28, 2014 02:12
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Laterbase posted:You forgot to mention with UK student loans they are also forgiven after 40 years. The only people who have it better are the Scottish. Free uni there. It'd be nice to see an expiration date on student loans in the U.S. Obviously it's a balancing act between protecting borrowers and creating an environment that attracts lenders. I remember having a poo poo time finding money for college, but that was when people could discharge everything in a bankruptcy. Now that student loan debt is permanent, it's a lot easier to find lenders. Or we could just say gently caress it and make public colleges free for what we spend on our pets each year. http://www.theatlantic.com/business...on-free/282803/
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Oct 28, 2014 02:32
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legsarerequired posted:Me: Remember, rent is due next week. I bet I could get this dude to buy me poo poo
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Oct 28, 2014 02:32
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Das Volk posted:Just out of morbid curiosity what rate did you get on your 6+ year loan?
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Oct 28, 2014 02:36
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NancyPants posted:I bet I could get this dude to buy me poo poo We should get him to buy us all giant mugs that say Truck Equity on them.
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Oct 28, 2014 03:59
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Comrade Flynn posted:We should get him to buy us all giant mugs that say Truck Equity on them. The logo should be a truck that has rolled into a lake and is underwater.
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Oct 28, 2014 04:42
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Krispy Kareem posted:It'd be nice to see an expiration date on student loans in the U.S. Obviously it's a balancing act between protecting borrowers and creating an environment that attracts lenders. I remember having a poo poo time finding money for college, but that was when people could discharge everything in a bankruptcy. Now that student loan debt is permanent, it's a lot easier to find lenders. Federal loans are forgiven after 20-25 years of payment. Less if you work in a non profit or public sector. You just need to be on the right payment plan for it.
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Oct 28, 2014 06:12
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I swear it must be overearning retard week over on reddit or something. http://www.reddit.com/r/personalfinance/comments/2kix9o/need_a_reality_check_household_income_220k_but/ quote:My wife and I both work and make about $110K each (excluding bonus) . CC debt is $40K and student loans are $150K. http://www.reddit.com/r/personalfinance/comments/2kit8s/never_thought_i_would_have_to_live_paycheck_to/ quote:I'm 29 and make 90K. I'm a frugal guy... He goes on to say they cant do anything about the insane Mortgage or costs because it would lead to a 'loss of status.'
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Oct 28, 2014 12:50
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At least he's a frugal guy. 
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Oct 28, 2014 12:58
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That is great. His dad is 55 an has ~200k in his 401k. That won't even pay the mortgage alone for 5 years. But the house is a status symbol and we'd become the laughing stock of the community!
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Oct 28, 2014 13:02
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Devian666 posted:The logo should be a truck that has rolled into a lake and is underwater. preferably pulled backwards by a boat on a trailer that is, also, underwater
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Oct 28, 2014 13:04
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Clearly he's inherited his ideas about status, etc. from his father. As someone says, his thinking about status is the way his dad has only 200k in his 401k at age 55 while making 120k. He needs to move to a smaller house, get his mom to work at a grocery store or something, and get his arranged marriage wife to work too.
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Oct 28, 2014 14:26
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Saros posted:I swear it must be overearning retard week over on reddit or something. Wait, how the gently caress is daycare $2100/mo for ONE kid? Is that right?
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Oct 28, 2014 16:00
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Comrade Flynn posted:Wait, how the gently caress is daycare $2100/mo for ONE kid? Is that right? Sounds right. My parents paid almost that much 15 years ago.
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Oct 28, 2014 16:02
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LorneReams posted:Sounds right. My parents paid almost that much 15 years ago. Your parents paid almost $100 per day? Christ, it's $35 per kid per day in my area. There's no way that $2100 number is right.
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Oct 28, 2014 16:09
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Laterbase posted:You forgot to mention with UK student loans they are also forgiven after 40 years. The only people who have it better are the Scottish. Free uni there. 25 Years if you started between 2006 and 2012! I got lucky, I'm in the band after they reduced the forgiveness limit but before they put the tuition fees up. Having said that I haven't started repaying yet - for some reason my work hasn't started deducting it yet. Does that make me bad with money?
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Oct 28, 2014 16:17
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Spermy Smurf posted:Your parents paid almost $100 per day? If it's a baby then that poo poo gets expensive, but I think the most we ever paid was around $250 a week for infant care. I don't know what the gently caress kind of artisanal diaper cream they're using to justify twice that price. Maybe they're lumping in all child expenses? At least they can deduct that. Even after we lost most of our child deductions, we still shaved several thousand off each year as a child care credit.
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Oct 28, 2014 16:18
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Spermy Smurf posted:Your parents paid almost $100 per day? Includes two meals, and transportation, so maybe it was an edge case. I know it was right around 2K because they often complained about it.
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Oct 28, 2014 16:37
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Comrade Flynn posted:Wait, how the gently caress is daycare $2100/mo for ONE kid? Is that right? At least based on Chicago prices.
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Oct 28, 2014 16:42
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Nail Rat posted:I think both he and the friend would be in big trouble for having such a large personal loan done in what's a pretty shady manner, without it being reported to the credit bureaus or the IRS. There's nothing illegal about that unless the initial loan was done in paper money.
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Oct 28, 2014 17:00
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Kiwi Ghost Chips posted:There's nothing illegal about that unless the initial loan was done in paper money. Really? I would think the IRS would consider the interest income to be taxable.
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Oct 28, 2014 17:11
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Nail Rat posted:Really? I would think the IRS would consider the interest income to be taxable. It is, but interest reporting rules don't apply to personal loans between individuals so the guy in debt is fine. The lender does have to pay taxes on the interest.
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Oct 28, 2014 18:01
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Comrade Flynn posted:Wait, how the gently caress is daycare $2100/mo for ONE kid? Is that right? When my wife and I priced out daycare for our <1 year old twins, the prices ranged from $5,000 per month to $2,400 per month, all within a 10 mile radius of each other. Daycare prices are widely variable and range from "Christ that's a lot of money" to "*gasp* *choke* HOW MUCH?"
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Oct 28, 2014 18:11
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Saros posted:I swear it must be overearning retard week over on reddit or something. $12k/month in take home pay with only $7k/month of expenses listed. He said they stopped contributing to their 401k's to get their expenses in order. I'll take "not telling remotely the whole story" for a billion, Alex.
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Oct 28, 2014 18:33
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Saros posted:I swear it must be overearning retard week over on reddit or something. quote:Most debt was incurred while our incomes were lower (both <$50K 5 years ago). This year we bought a house for $465K and have spent about $50K cleaning it up Does not compute.
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Oct 28, 2014 18:45
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http://www.reddit.com/r/personalfinance/comments/2kkwwd/working_just_to_pay_the_bills_uk/ Yeah... quote:"he works a minimum wage part time job (this is by choice by the way so he can spend more time on his music)" 
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Oct 28, 2014 19:17
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He's a "musician type". Did she expect him to be good with money?
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Oct 28, 2014 19:22
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