Deferral for a year

[danielallen2008]

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I was accepted into ICO, I am planning to matriculate, however, due to finanical problems I am hoping to defer for a year (to pay off my debt in canada) before starting opto school, the admissions counsler understood my issue and said that most times the admissions committee allows students defer, on a case by case basis. I need advice, should I defer, or pull up my boot straps and go, Im just worried about taking on another loan before having one paid off ( I would also be accumulating interest which has to be paid every month) I am also from Canada, and the dollar sucks, so I think having some extra money before starting opto school would be ideal, thanks for any advice!!!!

 

[gochi]

How large is the loan amount?
What is the interest rate on the loan?
How long is the grace period? (some agency's do not charge interest on the loan provided that you are still in school)
What type of a loan is it?

 

[danielallen2008]

36000 in debt, its from a bank at 1 plus prime which i think is 5%, and I dont think they will give me a grace period for interest payments which I accur every month, about 250 CAD- 220 US a month, I dont know what to do, is it worth me taking off a year to pay off my debt and saving up a bit of money for opto school, or should I just go?.........I am worried about taking off a year, since opto school will be really hard especially after being away for a year.........any suggestions?

 

[captainnerd]

36000 in debt, its from a bank at 1 plus prime which i think is 5%, and I dont think they will give me a grace period for interest payments which I accur every month, about 250 CAD- 220 US a month, I dont know what to do, is it worth me taking off a year to pay off my debt and saving up a bit of money for opto school, or should I just go?.........I am worried about taking off a year, since opto school will be really hard especially after being away for a year.........any suggestions?

Is this a student loan? Or commercial loan? It sounds like a commercial loan. Is it possible to take financial aid money to pay for this loan and live cheaply? I would max my financial aid and pay off the loan or pay it off as much as possible. For example, if my school/living expenses were about 35K, I would max it to about 48K and take the additional 13K to pay off credit card debt. I would rather have my debt be in the form of student loan which you can then pay off in a 30 year form post graduation at a lower interest rate.

It is completely up to you. Keep your head up. I started a business after graduating and saw credit debt reach as high as $60K. As long as you can manage finances properly, it is a great learning experience. Today, I am debt free and run a nice little side business. I'm going back to optometry school after 4 years since graduating undergrad so I don't think it is a problem to be away from school (although I worked in a science-based industry so I sorta kept up).

If you defer for one year, what job will you be doing that will be able to pay down the debt? Once you account for living expenses, I don't think you'll be able to make much of a dent in your debt. I'm just playing devil's advocate.

Also, you have to think about your credit score. I would rather have $180K in school debt than have $140K in school debt+$36K in commercial debt. Think about how that may affect your ability to take out a business loan or a parcel mortgage when you decide to open a practice. Try to explain that to a loan officer. You don't have to tell the loan officer the whole truth about your previous debt (the $36K part). All you have to explain is the $180K in school loans part.

It is your decision. But if it were mine, I would just go. I don't know how you guys do it in Canada, but in America, debt is good. It is the basis of our capitalist system. It can reward you and it can burn you. If it is invested into education, I think it is always a good investment. And we always give second chances. Henry Ford once filed for bankruptcy. And then went on to found Ford Motors.

EDIT: I just did the conversion, $36K Canadian is $30K US. That's nothing. You can pay that off in about 3 years of student loan extras. 2 years if you live frugally.

 

[gochi]

36000 in debt, its from a bank at 1 plus prime which i think is 5%, and I dont think they will give me a grace period for interest payments which I accur every month, about 250 CAD- 220 US a month, I dont know what to do, is it worth me taking off a year to pay off my debt and saving up a bit of money for opto school, or should I just go?.........I am worried about taking off a year, since opto school will be really hard especially after being away for a year.........any suggestions?

Have you consulted with the bank about your situation? Perhaps they are not aware you will be going to school.

There must be more options, no?

With this given scenario, I really don't know what I would do. $36000 is alot of debt.

If you do take this year off to manage your debt, are you guaranteed a spot in Optometry school for next year? If so, atleast this might be one reason to take that year off.

 

[danielallen2008]

Is this a student loan? Or commercial loan? It sounds like a commercial loan. Is it possible to take financial aid money to pay for this loan and live cheaply? I would max my financial aid and pay off the loan or pay it off as much as possible. For example, if my school/living expenses were about 35K, I would max it to about 48K and take the additional 13K to pay off credit card debt. I would rather have my debt be in the form of student loan which you can then pay off in a 30 year form post graduation at a lower interest rate.

It is completely up to you. Keep your head up. I started a business after graduating and saw credit debt reach as high as $60K. As long as you can manage finances properly, it is a great learning experience. Today, I am debt free and run a nice little side business. I'm going back to optometry school after 4 years since graduating undergrad so I don't think it is a problem to be away from school (although I worked in a science-based industry so I sorta kept up).

If you defer for one year, what job will you be doing that will be able to pay down the debt? Once you account for living expenses, I don't think you'll be able to make much of a dent in your debt. I'm just playing devil's advocate.

Also, you have to think about your credit score. I would rather have $180K in school debt than have $140K in school debt+$36K in commercial debt. Think about how that may affect your ability to take out a business loan or a parcel mortgage when you decide to open a practice.

Its a student line of credit from my bank, I dont think I cant get any payment or interest relief with it, and Im not to fond of going to opto school as broke as a joke and a 36K loan looming over my head. I am currently a EMT-A and in Alberta I can make quite a bit as an industrial medic--------only if the oil prices go up....god willing HAHAHAHHA......yeah I know, not funny! so I could easily pay it off within a year+ this summer and save up some money

 

[gochi]

Is this a student loan? Or commercial loan? It sounds like a commercial loan. Is it possible to take financial aid money to pay for this loan and live cheaply? I would max my financial aid and pay off the loan or pay it off as much as possible. For example, if my school/living expenses were about 35K, I would max it to about 48K and take the additional 13K to pay off credit card debt. I would rather have my debt be in the form of student loan which you can then pay off in a 30 year form post graduation at a lower interest rate.


It is completely up to you. Keep your head up. I started a business after graduating and saw credit debt reach as high as $60K. As long as you can manage finances properly, it is a great learning experience. Today, I am debt free and run a nice little side business. I'm going back to optometry school after 4 years since graduating undergrad so I don't think it is a problem to be away from school (although I worked in a science-based industry so I sorta kept up).

If you defer for one year, what job will you be doing that will be able to pay down the debt? Once you account for living expenses, I don't think you'll be able to make much of a dent in your debt. I'm just playing devil's advocate.

Also, you have to think about your credit score. I would rather have $180K in school debt than have $140K in school debt+$36K in commercial debt. Think about how that may affect your ability to take out a business loan or a parcel mortgage when you decide to open a practice. Try to explain that to a loan officer. You don't have to tell the loan officer the whole truth about your previous debt (the $36K part). All you have to explain is the $180K in school loans part.

It is your decision. But if it were mine, I would just go. I don't know how you guys do it in Canada, but in America, debt is good. It is the basis of our capitalist system. It can reward you and it can burn you. If it is invested into education, I think it is always a good investment.

The student load debt repayment interest rate is higher than the posters 5% bank interest rate, no? I thought the load repayment interest rate was around 6.8%?

 

[danielallen2008]

Have you consulted with the bank about your situation? Perhaps they are not aware you will be going to school.

There must be more options, no?

With this given scenario, I really don't know what I would do. $36000 is alot of debt.

If you do take this year off to manage your debt, are you guaranteed a spot in Optometry school for next year? If so, atleast this might be one reason to take that year off.

Im pretty sure I can defer, if not I will apply again, I have pretty good stats, I admissions counsler said that the admissions committee accepts deferrals on a case by case basis, I think I have a good case.........or at least I hope!!

 

[captainnerd]

The student load debt repayment interest rate is higher than the posters 5% bank interest rate, no? I thought the load repayment interest rate was around 6.8%?

Yes, but repayment will begin once he graduates and his earning potential is much higher. But it appears he is an EMT so maybe it may be better to work a year. Also, commercial credit interest is calculated different than from some student loans. My current student loan interest is calculated once on the lump sum and then the lump sum is divided over a very long time (like some car loans). Commercial credit debt is usually calculated continuously, hence the $200 per month of just interest.

If it were me, I would go for it. But I have a brother who does finances and I'm more deft at financial juggling than most.

 

[danielallen2008]

Yes, but repayment will begin once he graduates and his earning potential is much higher. But it appears he is an EMT so maybe it may be better to work a year.

so student loan interest rates are prime % + 1%, the prime interest rate is 2.5% + 1%------mind you though the prime interest rate varies from month to month, in 2006-2007, it was as high as 5-6% plus 1%, so my payment right now is about 100 dollars, if the prime interest rate goes up my payment does too, I just dont think I want this over my head when Im stuggling to pay for opto school, but Iam still wondering if its worth taking a year off for?

 

[danielallen2008]

Yes, but repayment will begin once he graduates and his earning potential is much higher. But it appears he is an EMT so maybe it may be better to work a year. Also, commercial credit interest is calculated different than from some student loans. My current student loan interest is calculated once on the lump sum and then the lump sum is divided over a very long time (like some car loans). Commercial credit debt is usually calculated continuously, hence the $200 per month of just interest.

If it were me, I would go for it. But I have a brother who does finances and I'm more deft at financial juggling than most.

and I should also mention the payment is JUST interest, when they figured out that I graduated it will go into a interest + payment monthly payment

 

[danielallen2008]

and I should also mention the payment is JUST interest, when they figured out that I graduated it will go into a interest + payment monthly payment

But I would still have to pay the interest every month, even in opto school

 

[captainnerd]

But I would still have to pay the interest every month, even in opto school

So it appears this is student loan. Wow, Canada's system isn't very nice.

If you take the extra student loan and pay down the previous loan as much as possible, the interest amount will go down since your principle is down.

Hmmm, this is tough.

If this is student loan, you can't stop payment once you go back to school? Or is this a Canada/US issue? In the US, if you go back to school, any previous loan goes into dormant state. But I am assuming that since the first loan was in Canada and you are going to a US school, they won't stop repayment of the first loan? That sounds like a crappy deal.

 

[danielallen2008]

So it appears this is student loan. Wow, Canada's system isn't very nice.

If you take the extra student loan and pay down the previous loan as much as possible, the interest amount will go down since your principle is down.

Hmmm, this is tough.

If this is student loan, you can't stop payment once you go back to school? Or is this a Canada/US issue? In the US, if you go back to school, any previous loan goes into dormant state. But I am assuming that since the first loan was in Canada and you are going to a US school, they won't stop repayment of the first loan? That sounds like a crappy deal.

there is no dormant state, there is a interest payment every month, even in optoschool, the only difference is that if I wasent going to optoschool I would pay interest+ a principle payment every month, If I was to go to opto school, I would an interest payment every month........ I could take out more loans, especially US stafford loans ( I am a US citizen) but ICO is really expensive I wouldent have enough to make a significant dent in my previous loan and still have enough to pay for opto school

 

[danielallen2008]

there is no dormant state, there is a interest payment every month, even in optoschool, the only difference is that if I wasent going to optoschool I would pay interest+ a principle payment every month, If I was to go to opto school, I would an interest payment every month........ I could take out more loans, especially US stafford loans ( I am a US citizen) but ICO is really expensive I wouldent have enough to make a significant dent in my previous loan and still have enough to pay for opto school

and it is a Canadian loan, from the Bank of Montreal