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Need some financial advice please.

Discussion in 'BlackHat Lounge' started by xfactornos, Sep 25, 2011.

  1. xfactornos

    xfactornos Regular Member

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    Okay, I am looking for some solid advice. If you are under 20yrs old then you probably shouldn't be commenting.

    I have a college loan I have to pay back and its currently at $25k.
    The interest rate on the loan is 10.2% (freaking crazy high, its almost $5 a day in interest)
    I currently have $8.2k in stocks and $5k in cash.
    I am currently bringing in $880 cash per week(after taxes)

    My question is what should I do about this loan? Do I need to take everything I have and pay on it? Get it killed as fast as I can? Should I just pay $2k a month till its done? Do keep in mind I have other bills so I cant pay the whole 880 on it.

    Any advice with your reasons would be appreciated.
     
    Last edited: Sep 25, 2011
  2. adhept

    adhept Junior Member

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    How much are you currently making on your $8.2k in stocks?

    If it's less than 10.2%, then you're actually putting yourself in a worse position by not paying it off towards the loan. If so, put all of that into your loan ASAP and save yourself the interest.

    I'd keep the cash (always good to have a reserve fund) and pay as much as you can comfortably afford to as soon as you can. The longer you take to pay, the more it's going to cost you.

    IMO, considering the current goings on in the world economies, keeping your savings in stocks is about as safe as putting it all on red and hoping for the best.
     
  3. GiftGuru

    GiftGuru Supreme Member

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    I totally agree with adhept....I would dump the stock and concentrate on getting that 10% loan paid off ASAP
     
  4. Autumn

    Autumn Elite Member

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    ^^ This. Given the high risk of severe economic collapse in the near-ish future, you want to get out of all debt as soon as possible. Keep an emergency fund, sell as much of your stocks as you can (except for those that are still exhibiting strong growth or give you a good dividend) and put every cent you can to paying off your outstanding debts as soon as humanly possible. There are still going to be good opportunities for bargains in the equities market in the future.

    Student debt is particularly problematic because (in the US) you can't walk away from it, even if you declare bankruptcy in the future. 10+% interest is huge given that the price of money is currently close to zero. Interest rates in general can only go up from here.
     
  5. FrozenSpade

    FrozenSpade Power Member

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    get outta debt as soon as possible bro.
     
  6. cybersage

    cybersage Regular Member

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    See if you qualify for a loan modification or refinancing of the debt, it sounds like your student loans are from several years back when interest rates where higher (pre 2008)? But otherwise Adhept's advice is logical. The main thing is that you start paying more than your minimum payment so that you pay less over the long run. That said, you might also consider having some liquid assets available should an emergency occur (and stocks would classify as liquid assets).
     
  7. xfactornos

    xfactornos Regular Member

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    Okay thanks a lot guys. That's what I was thinking but wanted others advice. My stock has actually been doing very well. With the little bit I have it has gone up $2k, plus it keeps going up which is bad for me because I like to buy it and make the dividends. The stock only pays 5% dividends though so I agree with getting the loan knocked off.

    I got the loan in 2010, its through Chase.

    Thanks so much!
     
  8. angelas111

    angelas111 Jr. VIP Jr. VIP Premium Member

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    i would not get rid of my savings just to pay down the debt. how secure is your job? i would pull it out of stocks though for sure and put it in something a little safer. i would pay at least a $1500 a month on it and you will be done with it in a year and a half.
     
  9. NoirHat

    NoirHat Regular Member

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    what kind of tax credit do you get on the loan interest?

    you have the option of finding a great forex managed account for your stock $(4x is like the honey badger, it don't give a shit what the market is doing), refinancing the loan, or paying it off asap.
     
  10. xfactornos

    xfactornos Regular Member

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    @NoirHat, I don't know anything about taxes. I don't know how that's going to work? I have never messed with Forex.

    My job is as secure as any others I guess. I could be laid off/fired tomorrow... Everyone can be replaced.