Today's post is a solicitation of any advice that my readers might be able to give concerning student loan debt. Both Za and I have significant student loan debts. His is far worse than mine, since he got saddled with all of the student loan debt (both his and hers) in the divorce. Za's loans were also consolidated at a floating interest rate (ugh!), and his minimum payment is more than he can afford with child care payments. My loans are a bit more manageable, but I am mostly paying interest. The fact is, we both need to seriously deal with this debt. I started looking around for good books on how to deal with this, but they all seem full of advice that I already know. Does anyone out there have any good experience with "how to" manuals to pay of student loans so as to be able to actually have some savings for old age?
I own a house, and someone suggested I buy out my loans with a credit line. Za, however, owns nothing. How does one actually get this under control. Or, where does one go to get CHEAP professional help?
Not sure a credit line is the best idea, since I think they tend to have floating rates, but based on the assumption that you have some equity built up from capital gains on your house, you might talk to a mortgage lender about refinancing. There's a fixed cost to doing that, but if you're planning on keeping the house for a long time that's a good option. On the other hand, my guess is you might not be. On the third hand (!) if you do sell your house in a few years, you might be able to get enough in cap gains to pay off some (or all) of the loans. That might not leave you much left over to put into your new house - which is likely to be a whole huge new chunk of change, but you can get a whole huge new mortgage to cover that. The question you have to ask yourself is: does the %rate on your student loans beat the %rate you'd have to pay on your mortgage (either now or when you eventually move)?
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