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Should place my student loan in forbearance while I save for a downpayment on a home?

househungry asked:

I HAVE OVER $24,000 IN STUDENT LOANS AT AN INTEREST RATE OF ABOUT 8%. I’M LOOKING TO MOVE TO A BIGGER CITY IN THE NEXT 6 MONTHS AND WANT TO BUY A HOME THERE. I WANT TO SAVE AS MUCH MONEY AS POSSIBLE FOR A DOWN PAYMENT. SHOULD I PUT MY STUDENT LOAN ON HOLD WHILE I SAVE?
Asked on: 2012-11-09 03:44:06

3 Comments

  1. Domino says:

    the interest doesn’t stop when you do that. the last thing you want to default is a student loan that can ruin your credit faster than anything. plus it will help you get a better loan with less debt. work on paying that off asap. you will lose money by saving it because you can;t get more than 5% on savings while paying 8% on the loan

  2. cesquaq says:

    no. make payments and save. you might have to tighten the personal budget A LOT, but if you’re set on buying , you got to do what you’ve got to do. anyway are you sure you want to but when you first get there? the buying market stinks right now and you should live in a neighborhood before you buy there.

  3. Mark T says:

    Sounds like a couple of things.

    Sounds like you need to eliminate your debt.

    And perhaps be a little more realistic about your moving day, This might not be what you want to hear, but unless you have a cushy job waiting in the bigger city, 6 months isn’t sounding terribly realistic.

    Unless you are in a contract employment position and will be compelled to move, you need to do a couple of things.

    Get a hold of the book “All your worth”.

    It’s a lifesaver and totally worth whatever I paid for it.

    1. Get your regular monthly expenses under control rapidly.
    2. Get your discretionary spending down to an absolute
    minimum cancel the double up satellite tv, the gym membership nobody ever uses.
    3. Setup an emergency fund, about 1000 bucks to cover unexpected things, (late rent, phone bills, flat tires etc).
    4. Sock away a couple of months salary for the possibility of unemployment (at least)
    5. Start taking those savings and ATTACKING your debt.

    Attack your credit cards first, pay them off completely as aggressively as possible.
    Then attack your student loans, once you have those eliminated, you will you are in the “home” stretch.

    You can use the newly liberated cash for a “house” fund. If you have money in the house fund already, pay off the debt with that, and focus on getting rid of interest bearing debt, which screws almost EVERYONE.

    See :
    Read :

    See :
    /watch?v=YiOVNWoWTAU
    Read :
    /All-Your-Worth-Ultimate-Lifetime/dp/0743269888/

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