How to defer Student Loans For Military
How Do I Take Advantage Of The Military Student Loan Repayment Plan?
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Tim starts out this hour in taxes Merry
Christmas Tim how can we help Merry
Christmas Dave thanks for taking my call
sure what's going on so I I am on a baby
step two right now my question is
regarding my studio I just renewed my
contract with the military for another
six years and as part of that I got up
to $50,000 and stood on the payment
right now I have 16,000 left on my
student loan and I already called them
and they said but the catch with the
repayment and it's only $7,500 a year
over the six years okay I talked to them
and I said you know when I get this
$7,500 for the first year which would be
early next year you know how is that
applied and they said you'll be
considered paid ahead so right now my
monthly payments are about 180 a month
going up to like 220 next year and I'm
wondering with the debt snowball once
I'm paid ahead should I take that 180
and apply it to something else
you know something smaller a bit or
should I keep paying the 180 a month
toward my student loan while the
military's helping me pay it off okay
are you out of that accept your student
loan I know sir how much other like this
come on
well once I get rid of I'm trying to get
rid of my 25 thousand other car that I
shouldn't bought and I'm about to get
rid of that so then I'll be at about 50
thousand okay and what is the other 34
40 some credit cards medical bills a
smaller loan on another vehicle and I
think that's about it
and what's your household income around
sixty to seventy thousand okay and so
how quickly will you pay off fifty
thousand dollars to your 18 months to
two years yeah I'm taking two years on
my goal plus or minus the military
helping you with with 15,000 of it over
that two years right yes
so is your debt snowball not your
largest or your student loan not your
largest debt once you get rid of the car
it will be yes once I get rid of the car
that would be yeah I would just pay
minimum payments on the student loan the
least that you can pay until you get to
it and of course you're gonna have to
apply the 7,500 to it I'm assumed the
military pays that directly do they not
that's my understanding
yeah okay so they're gonna dump it on
the student loan and then you pay the
least that you can pay on the student
loan until you get to it in the debt
snowball and then you pay the most that
you can pay now the trick is you're not
going to get the other 7,500 to apply to
it until you would have already paid it
down below that correct so what I would
do is pay if they allow you to pay zero
payments for a while because you put the
7,500 on I would do that and then when
you do get to that snowball or get to
the student loan in your debt snowball
if it's down near 7,500 what I would do
is put all of the money that you would
have paid in it if the military wasn't
sending you a check in other words all
the money you're paying on that I would
put it in savings and I want an extra
7,500 in savings above your normal
emergency fund so that if something
breaks for some reason and you don't get
this money from the military that last
7,500 then you've got them I just write
a check pay it off okay and so you in if
they do of course come through then
you'll have just an extra $7,500 in your
savings okay so you set the money aside
as if you were getting out of debt but
don't pay your student loan below that
last 7,500 if you can help it until they
send you the check and then when they
send you the check write another check
with it the last the second 7,500 that's
15,000 out of the 16
and so you know if you have a little bit
of another 500 bucks or something just
clear it all up and you'll be done so
when that second check comes you should
be done correct yeah and and either from
the money in savings or from whatever
but just pay the least possible you can
pay on the student loan at all times
because it is the bottom of your debt
snowball until you get to it
hey good question thanks for serving the
country sir we appreciate you
