sporky_rat: The Roman Orator from Rome, hand upraised. Text: Ahem (ahem)
[personal profile] sporky_rat posting in [community profile] actyourwage
Hello, all!

I'm trying to whittle down my student loans as much as I can as well as the credit card statement that I use during the work-lean summers to help pay for groceries (those withdrawal pains are killer, I hear).

My question is, however, should I keep throwing as much money (On Time) at my loans and statement that I can afford or should I just keep at the minimum payment due? Now, I can't always pay more than the minimum but when I can, should I?

On the plus side, I've been able to save up a good bit in my savings account in the credit union!

(no subject)

Date: 2013-04-30 11:35 pm (UTC)
highlyeccentric: Sign on Little Queen St - One Way both directions (Default)
From: [personal profile] highlyeccentric
Hmm. I lean toward saying yes, pay as much off as you can. BUT. If your employment is seasonal, perhaps stash up money to pay for food over summer first?

(no subject)

Date: 2013-04-30 11:36 pm (UTC)
vass: A sepia-toned line-drawing of a man in naval uniform dancing a hornpipe, his crotch prominent (Default)
From: [personal profile] vass
Good on you for building some savings!

Do you have enough in your savings account to cover the summers without grocery money? That sounds like a good goal to aim for.

How much interest are you paying on the student loans and the credit card statement? What's the highest one? If it was me, I'd throw as much money at the highest interest one as I could afford, because when you've slain that one you'll be paying less interest and you'll have freed up that money for other things (like the other loans, or savings, or food and toilet paper.)

Alternatively, what's the smallest loan, the one you can pay off fastest? Some people get a really big boost from getting a win as soon as possible, so they'll pay that one off first.

(no subject)

Date: 2013-05-01 01:10 am (UTC)
crystalpyramid: crystal pyramid suspended in dimensional abnormality (Default)
From: [personal profile] crystalpyramid
I think you also get a small credit score boost when you pay something off.

(no subject)

Date: 2013-05-01 09:33 am (UTC)
crystalpyramid: crystal pyramid suspended in dimensional abnormality (Default)
From: [personal profile] crystalpyramid
Yeah, that's about where I was right out of college. We ended up having to put up an extra month's rent on an apartment because of it. The student loans eventually help, but it's a slow and expensive process. You used to be able to game your credit score by taking out small short-term loans and then paying them back gradually (I have friends who did this before buying a house), but I think it's harder to get those loans in the first place now.

(no subject)

Date: 2013-05-02 02:06 pm (UTC)
woggy: Dom (from the webcomic Megatokyo) talking on a phone (Dom)
From: [personal profile] woggy
'nother one here on the 'not much of a credit history' (well, okay, not so much me, but [personal profile] trombonish definitely). Our credit union has a nifty program where they give you a... I don't remember their wording, but it's a 'training wheels' credit card. I mean, it's an actual credit card, but they bypass the 'good history' bit by setting the initial limit to A Chunk Of Your Savings Account (determined by you; K started with $500, which isn't enough to buy anything huge but is at least some points on the radar, as it were.)
Edited (i can has markup) Date: 2013-05-02 02:06 pm (UTC)

(no subject)

Date: 2013-04-30 11:41 pm (UTC)
zana16: The Beatles with text "All you need is love" (Default)
From: [personal profile] zana16
You absolutely, no question, should. Interest is a bitch, especially long-term interest, and it makes things so much more expensive over the long run.

Student loans are generally lower-interest than credit cards, so I'd concentrate my efforts on the credit cards.

(no subject)

Date: 2013-04-30 11:55 pm (UTC)
crystalpyramid: crystal pyramid suspended in dimensional abnormality (Default)
From: [personal profile] crystalpyramid
I would agree with people saying it depends a bit on relative interest rates, but paying down loans is important. I know that in my own case, my credit card's interest rate is something like 15%, while my student loans' interest rate is less than half of that, so the financially smart choice is technically to prioritize not using the credit card before prioritizing throwing everything at student loans. So having a financial cushion to avoid relying on the credit card is important, especially if the financial cushion is also earning interest.

(no subject)

Date: 2013-05-01 01:14 am (UTC)
jamethiel: A majestic orange cat sits on a post in front of a beautiful green landscape. Text: I approve of this post (ApprovalCat)
From: [personal profile] jamethiel
I would say do two things. Definitely pay the minimum, but if you have any extra, split it in two and put half in a savings account that you can't/won't touch except for emergencies. That will stop you adding to your debt.

Then throw everything you've got either at the highest interest rate, or the smallest amount. (Whichever gives you the psychological boost for having paid it off sooner, or saving more money on interest.)

(no subject)

Date: 2013-05-01 02:25 pm (UTC)
From: [personal profile] indywind
Seconded.

(no subject)

Date: 2013-05-01 03:42 am (UTC)
beatrice_otter: This looks like a good day for World Domination (World Domination)
From: [personal profile] beatrice_otter
I agree with what everyone else says, but also: can you get a second job over the summers to tide you over? That might help a lot, firstly in that you would rack up less debt and secondly in that you might be able to keep paying down your loans. There are seasonal jobs, anything from hiring on with a landscaping crew to walking dogs. And there are websites out there that can help people find odd jobs:
https://www.taskrabbit.com/
http://www.thumbtack.com/
http://zaask.com/landing/
http://www.oddjobnation.com/
I've never used any of these, but I've heard good things.

(no subject)

Date: 2013-05-01 02:19 pm (UTC)
kareila: Scrooge with a piggy bank (money)
From: [personal profile] kareila
Another difference between the two debts that I haven't seen anyone else mention is the fact that on your federal taxes and in some states, college loan interest payments are tax deductible, while credit card interest payments are not. So that's another incentive to pay off the credit card debt first. That said, I totally understand the psychological boost from paying something off completely, and the flexibility of having fewer minimum payments to deal with.

Definitely pay more than the minimum on the credit card whenever possible. Even a little extra can take several years off the repayment time, depending on how high your outstanding balance is. And the amount of interest you're being charged on the credit card is almost certainly much higher than what you are earning by putting that money in the credit union.

(no subject)

Date: 2013-05-03 01:50 am (UTC)
lassarina: I'm not coming out until the stupid people have gone away.  ....I can wait all day. (Default)
From: [personal profile] lassarina
^^^ this!

Also, student loans look better on your credit report than credit cards; they give you far more points for paying them regularly.

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