A friend of mine has loans in the amount of ~$34K. About $7K is a car loan, with a current interest rate of 9.9%. The other $27K is a student loan, which since he is no longer in school, is at 11.25%.

He's always paid on time, has a steady job for several years with a provable income, and his credit score should be pretty good (I'm asking for him to find out what exactly it is).

After reading all the fantastic threads I've seen here in the finance forum, I was hoping that some people might have some thoughts as to how he could better pay off his debt then the current situation. As it stands, hes barely touching the principle on the student loan with the majority of the payment going towards interest. With his current plan he is working on getting the car paid off in the next two years.

Whats a good plan of action? Refinancing somewhere else? Focusing more/less on one or the other?

Thanks in advance.

It's always someone's friend.

healthynut said:A friend of mine has loans in the amount of ~$34K. About $7K is a car loan, with a current interest rate of 9.9%. The other $27K is a student loan, which since he is no longer in school, is at 11.25%.

He's always paid on time, has a steady job for several years with a provable income, and his credit score should be pretty good (I'm asking for him to find out what exactly it is).

After reading all the fantastic threads I've seen here in the finance forum, I was hoping that some people might have some thoughts as to how he could better pay off his debt then the current situation. As it stands, hes barely touching the principle on the student loan with the majority of the payment going towards interest. With his current plan he is working on getting the car paid off in the next two years.

Whats a good plan of action? Refinancing somewhere else? Focusing more/less on one or the other?

Thanks in advance.

Obviously try to get refinanced, and then pay more towards whichever has higher interest. If his/your credit is in the tank, try talking to the people at a credit repair forum such as CreditBoards

DjPiLL said:dmlavigne1 said:It's always someone's friend.


Have your friend post a thread here and we can help him.

Honestly, I would, but he seems highly unmotivated as I don't think he realizes there are better ways, as most of the population doesn't. He believes it will be too difficult to manage, or too much to learn, and I want to help him realize, with the knowledge of this forum, how to empower himself with better financial planning.

I don't know why wanting to aid in a friends struggle is voted negative. If you'd like to know, I go to community college so I pay for school outright and have no debt to speak of. I also have no car payment, or any loans. I live quite frugally within my means. I'm also young though, and have little in terms of assets. I've been enjoying learning from the finance forum, and I figure that if I can learn for my own sake while helping a friend, its worthwhile.

I'd really appreciate advice, rather then scorn. Its hard convincing someone else I'd like to help (with your collective help), if I can't even get sincere attempts from those with the knowledge.

healthynut said:Honestly, I would, but he seems highly unmotivated as I don't think he realizes there are better ways, as most of the population doesn't. He believes it will be too difficult to manage, or too much to learn, and I want to help him realize, with the knowledge of this forum, how to empower himself with better financial planning.

You really want this type of person as your "friend"?

healthynut said:As it stands, hes barely touching the principle on the student loan with the majority of the payment going towards interest.

If your friend is not motivated/intelligent enough to realize that he needs to increase his payments to his student loan so that he can decrease the principle, what will any of the financial advice given here do to ameliorate his position?

As stated, your friend has not asked for advice on his finanances; rather you are trying to make him "realize" how to take care of his life. If he is fine with the status quo, then you should be fine and let him worry about his life. People do not change.

Plan of action
1.Call each and try and get a lower rate direct loans is great on low student loan debt.
2. Pay minimum on each
3. Live like he is still a broke college kid and put all those savings into paying off the higher interest of the two debts
4 get a 2nd job doing something that is either fun or is something that will enhance his carrer long term and use that money to pay down debts.
5. yes he is likely in debt close to his yearly salary but he can do it if he tries if he sticks his head in the sand and refuses to face reality he will end up bankrupt

healthynut said:Honestly, I would, but he seems highly unmotivated as I don't think he realizes there are better ways, as most of the population doesn't. He believes it will be too difficult to manage, or too much to learn, and I want to help him realize, with the knowledge of this forum, how to empower himself with better financial planning.

If he doesn't care much about it, unless you're planning on having a long-term relationship with him involving interdependent finances, why do you? If he's always broke and is a mooch, tell him he needs to learn how to manage his money well enough to pull his own weight or else just stay home.