Earlier today, Credit.com hosted our first Credit Experts TweetChat on Twitter. A big thank you to everyone who participated this afternoon! For those that missed it, we had Credit.com’s Farnoosh Torabi online to answer your questions about student loans, paying for college, financial aide and dealing with student loan debt.
I’ve included some of the more interesting questions and answers from today’s TweetChat:
Paying Back Student Loan Debt
Question: What’s the best way to attack student loan debt when you know it’ll take years to pay it off?
Answer: If it’s a federal loan, see if you can peg your monthly payments to your income. Check out IBRinfo.org, for information on Income Based Repayment options. Or, try to reduce the loan’s term. You’ll have to pay higher minimum/month, but you’ll be out of debt faster.
Volunteering Your Way Out of Student Loan Debt
The same consumer was explaining that increasing payment and reducing the term of her debt scared her and would leave her “poor” for a while. She was encouraged to get a ‘student loan’ gig to help pay down the loan. There are also ways to volunteer your way out of student debt.
[Related Reading: Volunteer Your Way Out of Student Loan Debt]
Student Loan Deferment & Forbearance
Farnoosh also explained the possible risk of deferring on your student loan–watch out for accumulated interest charges during your forbearance period. That $20k student loan could become $25k quickly.
When asked investing advice by a consumer who isn’t certain that opening a ROTH IRA was wise, Farnoosh assured her that it was a good move.
She said, “I’m a big fan of IRAs. A Roth is great because you won’t need to pay taxes on withdrawals. Stick with no-load mutual funds in your IRA, since those don’t carry commission fees.”
Third Party Debt Help
One of our participants also had concerns with using outside or third-party help to fix their debt problems. Farnoosh explained that “the most trusted financial advisors are CFPs that charge you a flat consulting fee and don’t get paid commissions.” And to “make sure he/she understands your goals, communicates well and again, gets a flat rate (annual or per hour).”
Have a question for Farnoosh or one of Credit.com’s other Credit Experts? Post it in the comments section below, or send us an email at firstname.lastname@example.org.
To see full transcripts of today’s tweetchat with Farnoosh, click here.
Image by TPorter2006, via Flickr