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Hey FatWallet!

So, my wife currently has $54k in student loans that I'd like to pay down as fast as possible. I am currently paying $1,800/month. At this rate, with this interest rate (6.8%), it will take ~33 months. I've been searching high and low for a way to lower the interest rate, and I can't seem to find any way to do it.

Does anyone know of a way I can get less than 6.8% on a loan I can use to pay off the student loan?

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You need to tell us what kind of loans they are and who owns them, and the interest rates. Are they private, federal, fix interest, variable interest? They might be something you can do by consolidating a few of them, or you might at least be able to optimize your payoff in a couple different ways. But, we need an itemized list of loans to know anything.

I dont know of direct ways to lower the rate. But if you have access to promotional BT offers (e.g. 0% for 12-18 months, with say 2-3% fee), you can possibly use that. Make sure you will be able to payoff the BT within the promotional period and make the minimum required payments on the student loan. Also, see what tax implications this will have (student loan interest may be deductible but BT fees are not).

Also, what kinds of credit do you both have. Any opportunity for 0% BTs for either of you? What assets do you have?

Just get a margin loan for a handful of basis points above Libor. Or, alternatively, provide some more details so you can actually get some useful ideas.

Are the loans subsidized? If so, have your wife enroll half time to easy online community college courses... that way you can indefinitely delay payments or interest compounding via "in school deferment".

Infinion said:   Also, what kinds of credit do you both have. Any opportunity for 0% BTs for either of you? What assets do you have?

Sometimes you read something like this and realize, duhhh why haven't I done this already. Sometimes I really wonder about myself.

The BT option is something I'm seriously considering, we have about 30k left, paying $700 a month. Looking for a 24 month or for life promotion, best I've seen is 21 months 0%, I could always do that and then roll to another when the time is up. The interest deduction for the loans is minute for us because of the stupid income limits so the interest savings would be a better way to go. I just haven't found the best deal yet.

If you have an asset with equity (car, house), you could take a loan out against that. Home equity loans for that amount can be around 4% and are tax deductible.

If you have an asset with equity (car, house), you could take a loan out against that. Home equity loans for that amount can be around 4% and are tax deductible.

sublimebri said:   If you have an asset with equity (car, house), you could take a loan out against that. Home equity loans for that amount can be around 4% and are tax deductible.

I second this, but just be aware what you're doing here. You're trading unsecured debt for secured debt with a lower interest rate. Student loans are actually some of the best debt you can carry unless you get stuck with a high interest rate and can't do anything. I went to school at about the optimal time and most of my loans are now at 2% (variable rate, consolidated low, repayment benefits, auto pay discounts). But, I do have some that got stuck at 6.8%. So, I didn't consolidate those in, just the variable ones, so I could pay the loans back in the most optimal way.

Infinion said:   sublimebri said:   If you have an asset with equity (car, house), you could take a loan out against that. Home equity loans for that amount can be around 4% and are tax deductible.

I second this, but just be aware what you're doing here. You're trading unsecured debt for secured debt with a lower interest rate. Student loans are actually some of the best debt you can carry unless you get stuck with a high interest rate and can't do anything. I went to school at about the optimal time and most of my loans are now at 2% (variable rate, consolidated low, repayment benefits, auto pay discounts). But, I do have some that got stuck at 6.8%. So, I didn't consolidate those in, just the variable ones, so I could pay the loans back in the most optimal way.


Do student loans really count as unsecured? I thought they survived bankruptcies and such. Maybe they can't take an asset from you, but they never go away...

tehlorax said:   Do student loans really count as unsecured? I thought they survived bankruptcies and such. Maybe they can't take an asset from you, but they never go away...They are unsecured to a specific asset but they are secured to your soul.

tehlorax said:   Infinion said:   sublimebri said:   If you have an asset with equity (car, house), you could take a loan out against that. Home equity loans for that amount can be around 4% and are tax deductible.

I second this, but just be aware what you're doing here. You're trading unsecured debt for secured debt with a lower interest rate. Student loans are actually some of the best debt you can carry unless you get stuck with a high interest rate and can't do anything. I went to school at about the optimal time and most of my loans are now at 2% (variable rate, consolidated low, repayment benefits, auto pay discounts). But, I do have some that got stuck at 6.8%. So, I didn't consolidate those in, just the variable ones, so I could pay the loans back in the most optimal way.


Do student loans really count as unsecured? I thought they survived bankruptcies and such. Maybe they can't take an asset from you, but they never go away...


Yes, they're unsecured. What could they secure? Your education? But it's true that it's almost impossible to get rid of them, save for various service opportunities and such. The forbearance options, etc are nice though, you don't get those with secured debt.

Yeah, student loans will survive bankruptcy. Their interest is also tax deductible(up to certain income levels). I wouldn't switch it. Actually, correct me if I'm wrong everyone, but I always thought it was a good financial strategy to pay your student loans off last? Eh?

DShaw94 said:   Yeah, student loans will survive bankruptcy. Their interest is also tax deductible(up to certain income levels). I wouldn't switch it. Actually, correct me if I'm wrong everyone, but I always thought it was a good financial strategy to pay your student loans off last? Eh?

It might be if you can take full advantage of the tax deduction but if you don't get it and paying the interest you want them done as soon as possible, like in my case. About 3.5 years left and counting. I want them done sooner than later.

DShaw94 said:   Yeah, student loans will survive bankruptcy. Their interest is also tax deductible(up to certain income levels). I wouldn't switch it. Actually, correct me if I'm wrong everyone, but I always thought it was a good financial strategy to pay your student loans off last? Eh?

I would pay them off first in most instances.. For just what you said.. they Survive Bankruptcy.

bpd67 said:   DShaw94 said:   Yeah, student loans will survive bankruptcy. Their interest is also tax deductible(up to certain income levels). I wouldn't switch it. Actually, correct me if I'm wrong everyone, but I always thought it was a good financial strategy to pay your student loans off last? Eh?

It might be if you can take full advantage of the tax deduction but if you don't get it and paying the interest you want them done as soon as possible, like in my case. About 3.5 years left and counting. I want them done sooner than later.


student loan interest phases out between $55k and $70k for individuals (double that for joint returns). If you graduated with halfway reasonably marketable skills, you should be completely phased out of the SLI deduction for individuals within 5 years. Engineers when I graduated were making $55k straight out and were up to $80k or so within 6-7 years of graduation. If you're married with a non-working spouse, you get to keep it for longer, but it's still not great. Plus, the rates are enormous (at least for grad school loans, which are the bulk of what I have right now) and survive through bk. You'd do better to roll the debt into a home loan--which is always deductible and is a way lower interest rate right now. Of course, you have to have equity from somewhere...but it's worth it if you can.



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