Group Writing Project: Personal Experiences with Loans

photo credit: Derek Farr ( DetroitDerek )

This month’s group writing project is about our personal experiences with loans. I’d say that with over 100l in student loan debt I’m quite familiar with the subject.

My experiences with loans includes the following:

Student Loans

After a BA in Criminal Justice and 2 MAs in Forensic and Counseling Psychology I am facing over 100k in student loan debt set to begin repayment in January 2010. Am I concerned or worried? Not really. Our plan is to continue living off my husband’s salary while I use mine to sock knock down at least 75% of it within 3-5 years. Tough but it works and we won’t be facing paying this sizable debt for the next 30 years.

Auto Loan

I’ve only had one auto loan. My first car upon moving to the area after graduate school. I got a great interest rate but a longer term. My rate is around 5.99 percent and I still have less than $2k to go in paying it off. Since we are buying a second car this month, I am planning to throw this month’s blog revenue towards the payoff of the current car. I really hope to pay it off by December because I don’t want two car payments. We would sell the current car, but DH wants to keep it “just in case”.

photo credit: lumaxart

Mortgage

Our mortgage was obtained June of last year. We bought a 4BR 2.5BA house, 3000 sq ft with a finished 1000sq ft basement. Our interest rate is 5.375% which is pretty sweet. We were able to go through ACORN and get the mortgage one point below market. Our mortgage guy told us about being able to get our principal amount written down so we are looking into that as it would amount to around a $200 payment reduction per month. $500 would sweeten the pot. We’ve lost around $60k in value since moving in so that would be a welcomed plus for us since it seems that foreclosures and short sales are going on all over our area right now.

Credit Cards

Probably the bane of my existence but working on it. I recently started branching out in diversifying the types of credit I have because I’ve only had one credit card for the longest time. So this summer I applied and got a card through another company (sorry I dont give out specific personal finance info on the net) and it’s been pretty good. First experience with a cash back rewards card so Im looking towards that end of year check.

Question: What are your experiences with loans? Good ones? Bad ones?

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About the Author: Girls Just Wanna Have Funds is for the woman that wants to take charge of her personal finances. We value budgeting, investing, frugality and remain mindful of our spending habits. Move over and make way for women who are in control of their financial destinies and not afraid to say it. We're armed with a positive net worth and not afraid to flaunt it while breaking financial ceilings one stiletto at a time!

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Miranda (4 comments.) | Sep 17, 2008 | Reply

Thank you for sharing your experiences. I have had these same experiences, plus a payday loan. Once upon a time, I felt that I had nowhere else to go. And I got a payday loan. Ick. But all the experiences I have had with loans has made realize how terrible debt is, and I am much more careful than I was in my “wild” and younger days.

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Gdubfunds | Sep 19, 2008 | Reply

My experience with loans:

I did not have any college loans in undergrad. But I did get a famous Sallie Mae loan for grad school (MBA). I paid it off in 2-3 yrs afer graduation.

I’ve only had one auto loan. My first brand new car that I got straight out of college. A present to myself. It was horrible. I leased the car (that’s a no no), then I had a 8% rate since I didn’t have a big credit history. After the lease period was up I decided to keep the car and the remainder of the loaned rolled over. Took me 4.5 yrs to pay it off. I kept the car for 11 yrs until it was totalled. I saved to buy a new car outright with cash. Now if I can let the frugal side and want side compromise to get a car.

I recently got my first mortgage loan last year. I’m sure I did not get the best deal. It was for a new build condo/townhouse. I was not able to lock in any low rates becuase my condo was not complete until the rates rose back up. The incentive to go with the builder’s lender (a broker) was $1000. After applying with other mortgage companies it appeared that the broker was the best bet at the time. My loan was bought by another company. Payments are automatically deducted. 30 yr fixed with 20 % down and I don’t plan to refinance. I plan to make one extra payment per year.

Now on to the topic of personal loans. I have given out personal loans to several people. Some have paid me back and some are still paying me back and some never paid me back. I would love to get into the loan shark business .. LOL. Anyhow, my return on personal loans is very little. I’m still learning how to make it a smooth process. I usually use a set dollar amount fee, but I’m thinking the fee is too low.

I have always paid my credit cards off in full. Years ago I made the God-awful mistake of putting an ex-boy toy on my $500 limit credit card. This sucker called and increased the limit to $2000 and ran it up. Of course he didn’t pay. I had to take him to small claims court where I won, and he made one payment. I never pursued it further. I chalked it up to lessoned learned.

Group Writing Project: Personal Experiences with Loans

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