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afsjesse
Joined: 23 Sep 2007
Location: Kickin' it in 'Kato town.
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 Posted: Tue Sep 02, 2008 11:56 pm Post subject: Student loan advice |
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So I'm angry with fury over the current exchange rate and am questioning wether or not another year in Korea is worth it. However the case, I'm staying, but I would like some opinions from the famous dave's economists! 
It will now cost me close to 550,000 WON per month minimum to pay my loans in Korea. While I came here to pay debt, I also want to save about 1000 USD per month... this is now impossible if I pay my loans.
Is it advisable or just lunacy to put a forbearance on my loans for about 6 months so I can save more money and let the currency regain strength, if it does, or should I just swallow this large pill and pay it each month and save less? I fully understand that interest would accumulate and have considered this with great thought.
Any opinions welcome! |
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nolegirl
Joined: 17 Apr 2008
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| Posted: Wed Sep 03, 2008 12:03 am Post subject: |
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Make minimum payments on loans and wait for the won to strengthen. But letting your loans defer for 1-2 years is like taking the last 1 year of payments and flushing it down the toilet.
Either defer and let the interest accumulate or pay with a weak exchange rate. Personally, I would not defer, just pay the bare minimum and wait...
Talk to your loan company and see if you can consolidate to a lower monthly payment. |
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nolegirl
Joined: 17 Apr 2008
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| Posted: Wed Sep 03, 2008 12:05 am Post subject: |
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| If you post the interest amount you are paying on your loans you can average out to see what is a better deal. |
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T-dot
Joined: 16 May 2004
Location: bundang
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| Posted: Wed Sep 03, 2008 12:45 am Post subject: |
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| apply for interest relief |
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sojourner1
Joined: 17 Apr 2007
Location: Where meggi swim and 2 wheeled tractors go sput put chug alugg pug pug
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| Posted: Wed Sep 03, 2008 1:56 am Post subject: |
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| T-dot wrote: |
| apply for interest relief |
Dang I wish that were possible, but it's not. Your loans will just get larger (capitalize) if not making enough payments and will stay the same if only paying the interest amount. I deferred for a long time during struggling low paying job and unemployment times and it grew from $36K to $41K in about 2 years. It's a real turkey to pay that much off unless I had about 5,000 to 10,000 a year I could just punch it out with, but I really don't since I'm saving that for a time I may need it such as when I leave the ESL profession and repatriate. That's critically needed relocation and transition back home money as no one is going to be helping me. I'm gunning to have 20K during a career change as I really don't want to be a teacher nor live in Asia. |
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silentwhispers
Joined: 24 Mar 2008
Location: Louisville/Atlanta
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| Posted: Wed Sep 03, 2008 7:15 am Post subject: |
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I suppose I'll be in the same situation as you.
How does that best work? I am used to having direct deposit and then transferring money to pay off bills/loans.
Is there a way to cheaply wire money from Korea to my US bank accts? |
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icicle
Joined: 09 Feb 2007
Location: Gyeonggi do Korea
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| Posted: Wed Sep 03, 2008 2:03 pm Post subject: |
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| It would definitely be possible to save what you want to save and to pay what you need to pay off the student loan, if you are on even the normal ESL salary here around 2.2 million won. And that would be without needing the live really cheaply. Unless you wanto to eat just western food and buy imported things it is not hard at all to do (really). Why do you think it will be hard to do? I know I might be missing something in your situation ... But it is definitely possible to do ... |
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afsjesse
Joined: 23 Sep 2007
Location: Kickin' it in 'Kato town.
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| Posted: Wed Sep 03, 2008 6:45 pm Post subject: |
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| First off I make 2.1 not 2.2... Second to the nutjob that still thinks its 1000 won to the dollar its not. It's 1160 (as of yesterday) to 1 dollar which gives me a grand total of 1750 USD per month... paying 500 USD on loans plus living and hardly saving much in the process. |
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saw6436
Joined: 16 Jan 2003
Location: Daejeon, ROK
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| Posted: Wed Sep 03, 2008 7:34 pm Post subject: |
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When I came here in 1998 average salaries were in the W1,400,00 to W1,500,000 per month. The exchange rate was hoveing arount $1=W1,350. I was making W1,600,000 a month doing OT. Like the OP I was torn between saving and paying off student loans. But I quickly realized that paying off a loan IS saving money. So, I maximized my loan payments and contented myself with saving less. 14 months later I had paid off ALL my loans and debt. At which point saving money took priority.
OP, do not defer your loans or apply to defer interest. If you do you will just be paying more in the long run. I was lucky, I really didn't have much by way of student loans. But my re-payment schedule extended to 2006 (I think). Paying my loans off early saved me a ton of money.
In short, I wouldn't worry too much about your bank balance. Getting out of debt is the quickest way of accumulating assets. Trying to balance the two can really bit you in the ass. My advise is pound your loans and pay them off early. |
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pkang0202
Joined: 09 Mar 2007
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| Posted: Wed Sep 03, 2008 7:47 pm Post subject: |
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My business mind is telling me you need to prioritize paying your loans over saving. Its kinda like credit card debt. Instead of paying it off ASAP, you do the bare minimum and the interest just kills you.
Try and pick up more overtime. |
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Join Me
Joined: 14 Jan 2008
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| Posted: Wed Sep 03, 2008 7:58 pm Post subject: |
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Bottom line is if you are in Korea you need to save something. This place can get crazy and you never know when the day may arrive that you have to leave or are shown the door. You need enough saved to land on your feet. I don't know where you are from but if you are from the US the interest rate on student loans is quite low. I would make it a priority to save enough to have an emergency fund then start to hit the loans. You will feel much more confident day to day in Korean knowing that you are not going to face financial ruin (and homelessness) if you end up working for a crazy and have to depart Korea.
You have the rest of your life to pay off your student loans. |
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sojourner1
Joined: 17 Apr 2007
Location: Where meggi swim and 2 wheeled tractors go sput put chug alugg pug pug
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| Posted: Wed Sep 03, 2008 8:18 pm Post subject: |
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| Join Me wrote: |
Bottom line is if you are in Korea you need to save something. This place can get crazy and you never know when the day may arrive that you have to leave or are shown the door. You need enough saved to land on your feet. I don't know where you are from but if you are from the US the interest rate on student loans is quite low. I would make it a priority to save enough to have an emergency fund then start to hit the loans. You will feel much more confident day to day in Korean knowing that you are not going to face financial ruin (and homelessness) if you end up working for a crazy and have to depart Korea.
You have the rest of your life to pay off your student loans. |
Best financial advice on Daves.  Of course, the Americans don't have much of a social program like other Western countries do. You have to earn that unemployment compensation by working for like 18 months straight and then you have to suffer layoff. The food stamp program is severely taxed as millions are lining up right now due to economic ruin.
Be ready.... |
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pkang0202
Joined: 09 Mar 2007
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| Posted: Wed Sep 03, 2008 8:53 pm Post subject: |
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| Join Me wrote: |
Bottom line is if you are in Korea you need to save something. This place can get crazy and you never know when the day may arrive that you have to leave or are shown the door. You need enough saved to land on your feet. I don't know where you are from but if you are from the US the interest rate on student loans is quite low. I would make it a priority to save enough to have an emergency fund then start to hit the loans. You will feel much more confident day to day in Korean knowing that you are not going to face financial ruin (and homelessness) if you end up working for a crazy and have to depart Korea.
You have the rest of your life to pay off your student loans. |
That's great advice, but I just feel like its a bad things to put off loans. What happens down the road when you go back home to the US. You need to make car payments, rent/mortgage payments, insurance, etc... Those student loans you are paying could be the difference in being able to increase your standard of living.
I'm jsut saying, you should knock your student loans out of the way ASAP. Otherwise, if you put it off, you will get hit with 5 other things you have to pay every month and it will be overwhelming. |
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Hyeon Een
Joined: 24 Jun 2005
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| Posted: Wed Sep 03, 2008 9:28 pm Post subject: |
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| Bradley Daiquiri wrote: |
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| First off I make 2.1 not 2.2... Second to the nutjob that still thinks its 1000 won to the dollar its not. It's 1160 (as of yesterday) to 1 dollar which gives me a grand total of 1750 USD per month... paying 500 USD on loans plus living and hardly saving much in the process. |
well i suppose it is all in what your willing to sacrifice. You can do it. just dont party so hard on the weekends. spending 400 a month here is alot. |
Spending 400 a month is a lot??
I think $800 is a bare minimum for spending money. I must live a less ascetic life than you.
$400 a month won't even get you 2 Daiquiri's a day! |
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Kiarell
Joined: 29 Mar 2008
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| Posted: Wed Sep 03, 2008 9:36 pm Post subject: |
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| Join Me wrote: |
Bottom line is if you are in Korea you need to save something. This place can get crazy and you never know when the day may arrive that you have to leave or are shown the door. You need enough saved to land on your feet. I don't know where you are from but if you are from the US the interest rate on student loans is quite low. I would make it a priority to save enough to have an emergency fund then start to hit the loans. You will feel much more confident day to day in Korean knowing that you are not going to face financial ruin (and homelessness) if you end up working for a crazy and have to depart Korea.
You have the rest of your life to pay off your student loans. |
What if something happens to your health or you get arrested and then fired? (Korea or in the West)
"Rest of your life" is a nice way of saying "putting off until tomorrow". This currency things is going to be a huge problem for many people. What to do? Go back to America and get a job teaching there......oh wait no jobs.....have to pay rent again.....How much longer will this ESL gig even last for? If Koreans face enough economic hardship they may start pressing to push more money into relief, not paying foreigners who wire half their money out of the country.
Okay, this is going in the gloom and doom direction, but the forecast is not sunny, that's all I know.
The advice, that you give, is good though. Having a slush fund is important in case you get deported or God knows what. It's a hard balance to keep, and the currency is unpredictable. The USD will crash sometime relatively soon, but it looks like the Won might suffer even more. |
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