Tweet
My fiance is in his last year of law school (finishing in May). His student loans need to cover his books and tuition, rent and food (basically everything). His loans were not enough to cover everything during his first and second year, so he of course used credit cards to stay afloat.
He maxed out these three cards and was struggling to pay the minimum payment on each one of them (each was over 20%!!!). He knew that he was in a ton of student loan debt, but didn't keep the total tallied. He didn't want to face any of it...he was scared of it.
But I figured...knock knock...hello? We are a team here. We are going to be MARRIED soon. And I may not be completely responsible for your student loan debt, but it will surely change the way that I make decisions and live.
I convinced him to take a look at his debt.
Well...the student loans are half private and half gov't. The gov't loans are about $66,000 at 6.8% and private ones are $63,500 at 8.2%. We will see if consolidating them is an option and if it makes sense to do so after he is finished with school. Even though this is huge debt - I feel like it is workable.
The credit cards were another issue. There were three credit cards that totalled $20,000...and he was struggling to pay monthly payments...I got him to sign up for a credit union and take out a personal unsecured loan for $20,000 with a 10.59% interest rate. At least he is making payments toward his debt rather than just paying the interest each month. At this rate, he will have it almost all paid off by the time we get married.
After he took out his loan and paid off his cards, I took a look at our credit reports. For all of the struggling he has gone through - he never missed a payment (thank you Jesus) and I am so happy to say that both of our scores are a little above 750. He feels so much better now...and when he graduates, the *only* debt we will have are his student loans (which I know, are HUGE).
In the meantime, I am working my heinie off teaching. My salary goes from $50k-$85k in 5 years (as per contract). He is starting off at $42,000 as an associate at a local law firm.
It's not going to be easy...we basically have a mortgage payment without a house (the student loan debt)...but I have high hopes. I am saving every single penny that I can right now to have something to put down on a house in a year or two.
He maxed out these three cards and was struggling to pay the minimum payment on each one of them (each was over 20%!!!). He knew that he was in a ton of student loan debt, but didn't keep the total tallied. He didn't want to face any of it...he was scared of it.
But I figured...knock knock...hello? We are a team here. We are going to be MARRIED soon. And I may not be completely responsible for your student loan debt, but it will surely change the way that I make decisions and live.
I convinced him to take a look at his debt.
Well...the student loans are half private and half gov't. The gov't loans are about $66,000 at 6.8% and private ones are $63,500 at 8.2%. We will see if consolidating them is an option and if it makes sense to do so after he is finished with school. Even though this is huge debt - I feel like it is workable.
The credit cards were another issue. There were three credit cards that totalled $20,000...and he was struggling to pay monthly payments...I got him to sign up for a credit union and take out a personal unsecured loan for $20,000 with a 10.59% interest rate. At least he is making payments toward his debt rather than just paying the interest each month. At this rate, he will have it almost all paid off by the time we get married.
After he took out his loan and paid off his cards, I took a look at our credit reports. For all of the struggling he has gone through - he never missed a payment (thank you Jesus) and I am so happy to say that both of our scores are a little above 750. He feels so much better now...and when he graduates, the *only* debt we will have are his student loans (which I know, are HUGE).
In the meantime, I am working my heinie off teaching. My salary goes from $50k-$85k in 5 years (as per contract). He is starting off at $42,000 as an associate at a local law firm.
It's not going to be easy...we basically have a mortgage payment without a house (the student loan debt)...but I have high hopes. I am saving every single penny that I can right now to have something to put down on a house in a year or two.