Loans
None of this is expert advice. It's what people worked out for themselves, usually the hard way — what actually helped, and what they'd tell someone standing where you are. Take what fits and leave the rest.
If you only read a few
Consider buying a cheap, simple 150cc scooter instead of a car.
They are cheap and have very simple maintenance/repair.
one person who lived it
Avoid using long-term repayment plans for short-term cash needs.
They result in excessive total costs and are not intended for this purpose.
one person who lived it
Avoid hardship reductions on loans if the monthly payment is less than the accrued interest.
You will not pay down principal while interest continues to accrue.
one person who lived it
Be aware that under income-driven plans like REPAYE, principal may not decrease for many years if payments do not cover accrued interest.
One person's principal hadn't gone down at all after 10 years despite monthly payments.
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File a dispute with credit bureaus if a forgiven loan reappears on your credit report.
Disputing can result in the item disappearing from the report within days.
one person who lived it
Check for state-specific low-interest loan programs that may offer deferred payments.
Some states, like Texas, offer boards providing loans at fixed rates like 4.5% with payments starting after graduation or dropping below full-time status.
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Transfer to a state school and take classes one at a time to cut down on private loan debt.
This allows you to pay upfront and potentially receive employer reimbursement after getting good grades.
one person who lived it
Be nice to loan servicer employees.
They make very little money and their jobs are difficult.
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Wait to purchase a car until at least the end of the year.
Market conditions are starting to normalize.
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Refinance high-interest private student loans through a bank or specialized lender to secure a lower interest rate.
Rates may be better than original rates.
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Be aware that lenders may harass both you and your cosigner excessively if you miss payments, even while you are still in school.
One lender harassed a student and his grandmother despite him still being a student.
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Contact your loan servicer immediately if you cannot make a payment to arrange help before defaulting.
They will help you.
one person who lived it
- Call your loan servicer to negotiate a payment arrangement rather than ignoring bills.1
Refinance auto loans through a credit union to potentially secure lower interest rates.
One person dropped their interest rate from 19.9% to 3.9% after refinancing.
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Contact your loan servicer and make any payment possible, even $1.00, to avoid defaulting on student loans.
Defaulting can jeopardize job opportunities.
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Be wary of using peer-to-peer platforms that promise guaranteed approval, as these often come with traps.
Guaranteed approval promises usually come with traps.
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Expect high interest rates when borrowing with bad credit, as this compensates lenders for the high risk.
High risk requires a high reward for the lender.
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Reject the myth that banks illegally front-load payments to interest before principal; standard amortization does not work this way.
Front-loading is illegal.
one person who lived it
Check your state laws regarding tax implications of loan repayment strategies.
To avoid issues with the IRS.
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Calculate monthly interest costs separately to understand the true burden of large loans.
Interest alone can amount to significant monthly payments, such as $1,000 on a $200,000 loan at 6%.
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Avoid buying used cars that are around 10 years old with approximately 150,000 miles.
They are often overpriced relative to their condition.
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Look into teacher loan forgiveness programs if you work in high-need areas such as inner-city or rural schools.
one person who lived it
Secure a liveaboard slip before purchasing a boat.
Liveaboard slips are rare, and finding parking first avoids homelessness or excessive commuting costs.
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Log into your loan servicer’s website to verify loan status, as credit reports may not reflect forgiven loans accurately.
A loan appearing on a credit report does not necessarily mean it was not forgiven.
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Make extra principal-only payments on simple interest loans whenever possible.
Interest is charged daily based on the principal balance, so reducing the principal reduces the next day's interest charge.
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Keep all documentation of disability determinations to defend against future collection attempts by schools.
A school tried to collect years later despite prior determination.
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Recognize that banks use deposited funds as liquidity to lend out at much higher interest rates while paying savers minimal returns.
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If eligible, consolidate federal loans with the Department of Education (avoiding Sallie Mae) to participate in the Public Service Loan Forgiveness Program.
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Recognize that wealth accumulation tends to favor those who already possess capital.
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