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Hi, I am hoping to find some advice on the most effective way of dealing with my debt. I recently decided to consider buying a home due to the new home buyer tax credit, however almost every mortgage agent I spoke to acted like it was a horrible crime to have student loans. I don't have to have a house right now by any means, but it is something I want to look to in the future.
Although I had a scholarship to my undergrad school, I still had to take out private loans to get through it. I have been in graduate school twice (I switched programs and had to retake a lot of courses which unfortunately burned a lot of money) and have taken out two public loans to pay for tuition, fees, living expenses etc. I have paid off all of my credit cards except for a Juniper Visa which I recently used to buy a new computer. I worked out my current expenses and I can spare $500 per month on average to put towards reducing my debt since I am working full time while going to school at night.
I borrowed $12,285 on my private loan, at at it's interest rate of 4.53%, it has accrued to a total owed of $13,507.51. My biggest graduate school loan is through Sallie Mae and it is for $20,500- no interest on this one has accrued since I am still in graduate school. The interest rate on that one is 6.8%. This should cover the rest of my graduate school and I don't intend to take out anymore. My other federal loan is through Wachovia. Luckily, during the gap between my two graduate schools I was able to pay off the interest on this one. It was originally for $8,500 at 6.8% but I have it paid down to $7,607.15.
My Juniper Visa has a balance of $1200 at 17.54% which doesn't begin to accrue until May 2010. I could pay this completely off right now, but I have heard that it is good to have some revolving debt to show responsibility in making payments on time.
Since I am actually in a position to shell out $500 per month while in graduate school, I want to take the opportunity to begin paying off my debt. I think that paying as much as I can while they are in deferment can make them less daunting when I graduate. So since interest is not actively accruing, should I tackle the largest loan with the lower interest rate, or the smaller loan with the higher intersest rate. Personally I would like to go the route that would keep the most money in my pocket at the end of it all, but I don't know which option will do that, because of the current deferment situation. Thanks in advance for any help!
Although I had a scholarship to my undergrad school, I still had to take out private loans to get through it. I have been in graduate school twice (I switched programs and had to retake a lot of courses which unfortunately burned a lot of money) and have taken out two public loans to pay for tuition, fees, living expenses etc. I have paid off all of my credit cards except for a Juniper Visa which I recently used to buy a new computer. I worked out my current expenses and I can spare $500 per month on average to put towards reducing my debt since I am working full time while going to school at night.
I borrowed $12,285 on my private loan, at at it's interest rate of 4.53%, it has accrued to a total owed of $13,507.51. My biggest graduate school loan is through Sallie Mae and it is for $20,500- no interest on this one has accrued since I am still in graduate school. The interest rate on that one is 6.8%. This should cover the rest of my graduate school and I don't intend to take out anymore. My other federal loan is through Wachovia. Luckily, during the gap between my two graduate schools I was able to pay off the interest on this one. It was originally for $8,500 at 6.8% but I have it paid down to $7,607.15.
My Juniper Visa has a balance of $1200 at 17.54% which doesn't begin to accrue until May 2010. I could pay this completely off right now, but I have heard that it is good to have some revolving debt to show responsibility in making payments on time.
Since I am actually in a position to shell out $500 per month while in graduate school, I want to take the opportunity to begin paying off my debt. I think that paying as much as I can while they are in deferment can make them less daunting when I graduate. So since interest is not actively accruing, should I tackle the largest loan with the lower interest rate, or the smaller loan with the higher intersest rate. Personally I would like to go the route that would keep the most money in my pocket at the end of it all, but I don't know which option will do that, because of the current deferment situation. Thanks in advance for any help!
However, a portion of the Sallie Mae loan (5k, I believe) is unsubsidized so it is showing on my account that it is accruing interest. Oh and a paid the credit card debt in full because I was tired of it hanging over my head and I wanted to turn over a new leaf with NO cc debt.
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