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TN, USA
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Posted: 5/6/2024 8:18:11 PM EDT
To pay off her student loans. She'll repay it in 10 years. I will need insurance on her. What will it cost and will it be difficult to get? If it was 10-20k I wouldn't bother. But 65k is a lot of vulnerable money. I'm calling the insurance company tomorrow. Thoughts? Thanks, guys.
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Posted: 5/6/2024 8:20:43 PM EDT
[Last Edit: Michaelson]
[#1]
A small term policy for a young woman in good health shouldn't be much at all.
I'd probably price out a $100-250k policy since it'll be relatively cheap. That way, if the worst happens, there would be something to help her eventual children. |
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Posted: 5/6/2024 8:22:23 PM EDT
[Last Edit: tveddy]
[#2]
Talk to your financial advisor. There has got to be a good way of structuring it.
Eta. I guess i should elaborate a bit. If you do a universal life policy you can put back money that works like a roth. But i cant explain it. |
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IA, USA
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Posted: 5/6/2024 8:22:51 PM EDT
[Last Edit: bnz42]
[#3]
As a rule, I never loan money to people, especially family. Never.
If they really need it, I'll give them the money. The potential for problems, in loaning money, is huge. |
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Posted: 5/6/2024 8:23:28 PM EDT
[#4]
Why doesn't she pay them off? She's getting a loan to pay off a loan?
Why doesn't Biden pay them off and you both win? |
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Posted: 5/6/2024 8:32:50 PM EDT
[#5]
Quote HistoryOriginally Posted By tveddy: Talk to your financial advisor. There has got to be a good way of structuring it. Eta. I guess i should elaborate a bit. If you do a universal life policy you can put back money that works like a roth. But i cant explain it. Well, there better be. Otherwise, merrill, schwabe, morganstanley, fidelity, etc., should seek a refund. |
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Posted: 5/6/2024 8:34:00 PM EDT
[Last Edit: BlackFox]
[#6]
No offense OP, but that's kind of a strange move. Student loans usually have low rates, long payment terms and favorable terms. Using cash to pay those off doesn't make a lot of sense on the surface. Further, you said she'd pay it off in 10 years. Do you mean over 10 years (i.e. 120 monthly payments) or a lump sum in 10 years?
ETA: awkward use of post 9,000! |
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Posted: 5/6/2024 8:37:09 PM EDT
[#7]
Op, I would hold off if I were in your shoes.
What if the government decides to dissolve all student loans? I don't know the details, but could she get the money back if they did that? Besides generally student loans have a very low interest rate, so unless she needs that loan off her credit for some reason, I don't see the point of paying it off. |
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Posted: 5/6/2024 8:38:07 PM EDT
[#8]
Quote HistoryOriginally Posted By bnz42: As a rule, I never loan money to people, especially family. Never. If they really need it, I'll give them the money. The potential for problems, in loaning money, is huge. This! |
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TX, USA
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Posted: 5/6/2024 8:38:44 PM EDT
[#9]
Should be buying bootstraps instead
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Posted: 5/6/2024 8:38:48 PM EDT
[#10]
FUCK joe biden
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Posted: 5/6/2024 8:39:03 PM EDT
[#11]
Don’t.
Either pay it off as a gift, or don’t get involved in her finances. 18Z50 |
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Posted: 5/6/2024 8:40:05 PM EDT
[#12]
I advise you either give her the money to pay the loan off with no strings attached, or not engage in this situation.
Getting an insurance policy on your child in case they default on a loan is a really bizarre/ undesirable situation to put your family in. |
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Posted: 5/6/2024 8:41:30 PM EDT
[#13]
Life insurance?
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GA, USA
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Posted: 5/6/2024 8:43:30 PM EDT
[#14]
Just have her call them and say she can't afford the payments and they'll work something out for her.
You'd be way better off just having her pay the student loans and lending her the 65k as a down payment on a modest house, to be repaid upon sale. |
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Posted: 5/6/2024 8:44:30 PM EDT
[Last Edit: HillaryClinton]
[#15]
Quote HistoryOriginally Posted By 18B30: Don’t. Either pay it off as a gift, or don’t get involved in her finances. 18Z50 This. I stopped lending to family. I'll gift what I can and accept it as a loss but I look at it if I can't afford to lose it, then I can't afford to loan it. |
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NC, USA
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Posted: 5/6/2024 8:44:46 PM EDT
[#16]
Quote HistoryOriginally Posted By tveddy: Talk to your financial advisor. There has got to be a good way of structuring it. If OP had a competent financial advisor, they'd probably tell him not to loan someone money to pay off a loan that they couldn't pay back. |
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TN, USA
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Posted: 5/6/2024 8:44:54 PM EDT
[#17]
Quote HistoryOriginally Posted By WWolfe: Why doesn't she pay them off? She's getting a loan to pay off a loan? Why doesn't Biden pay them off and you both win? The interest rates on the loans are awful. One is 10.75%. She can pay me 4.75% and it will save her $20k over 10 years. I'm insisting she do this. 4.75% is what I'm getting from the bank so it'll cost me nothing. One of the conditions you have to meet to get Biden to pay for them is you have to have been paying on the loan for more than ten years. She's only 2 years in on some of hers. There are other requirements you have to meet and she can't meet them either. |
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Posted: 5/6/2024 8:45:41 PM EDT
[#18]
You should leave her with the original loan. Why do you want to assume it? IMO, you are setting yourself up for disappointment.
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Posted: 5/6/2024 8:45:48 PM EDT
[Last Edit: uxo2]
[#19]
You already paid for it op
Apply for Biden loan forgiveness. 
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IN, USA
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Posted: 5/6/2024 8:46:08 PM EDT
[#20]
Lmao
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Posted: 5/6/2024 8:46:44 PM EDT
[#21]
Agree with others, really no reason to pay off. Other than to be debt free, if just shifting debt from a bank some where to Dad what is the point. However, anytime you are loaning money to family or friends it has to be considered a gift. If it comes back fine but if it doesn't it could ruin the relationship if you don't go into it thinking of it as a give away. |
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USA
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Posted: 5/6/2024 8:49:47 PM EDT
[#22]
Quote HistoryOriginally Posted By tnwalker10: The interest rates on the loans are awful. One is 10.75%. She can pay me 4.75% and it will save her $20k over 10 years. I'm insisting she do this. 4.75% is what I'm getting from the bank so it'll cost me nothing. One of the conditions you have to meet to get Biden to pay for them is you have to have been paying on the loan for more than ten years. She's only 2 years in on some of hers. There are other requirements you have to meet and she can't meet them either. Quote HistoryOriginally Posted By tnwalker10: Originally Posted By WWolfe: Why doesn't she pay them off? She's getting a loan to pay off a loan? Why doesn't Biden pay them off and you both win? The interest rates on the loans are awful. One is 10.75%. She can pay me 4.75% and it will save her $20k over 10 years. I'm insisting she do this. 4.75% is what I'm getting from the bank so it'll cost me nothing. One of the conditions you have to meet to get Biden to pay for them is you have to have been paying on the loan for more than ten years. She's only 2 years in on some of hers. There are other requirements you have to meet and she can't meet them either. There is probably a lower rate she could get somewhere to consolidate. What is her degree and what is her starting salary? |
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NC, USA
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Posted: 5/6/2024 8:51:19 PM EDT
[#23]
Quote HistoryOriginally Posted By tnwalker10: The interest rates on the loans are awful. One is 10.75%. She can pay me 4.75% and it will save her $20k over 10 years. I'm insisting she do this. 4.75% is what I'm getting from the bank so it'll cost me nothing. One of the conditions you have to meet to get Biden to pay for them is you have to have been paying on the loan for more than ten years. She's only 2 years in on some of hers. There are other requirements you have to meet and she can't meet them either. WHAT THE FUCK. You mean, you don't even HAVE the 65k? Full stop. This is an awful plan. Love is clouding your judgement. She needs to look into loan consolidation at a lower rate and leave you out of it. |
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Posted: 5/6/2024 8:51:23 PM EDT
[Last Edit: Hobs98]
[#24]
Quote HistoryOriginally Posted By tnwalker10: The interest rates on the loans are awful. One is 10.75%. She can pay me 4.75% and it will save her $20k over 10 years. I'm insisting she do this. 4.75% is what I'm getting from the bank so it'll cost me nothing. One of the conditions you have to meet to get Biden to pay for them is you have to have been paying on the loan for more than ten years. She's only 2 years in on some of hers. There are other requirements you have to meet and she can't meet them either. Why did she take out private student loans. Is this for a Doctorate or something else. All government subsided student loans are 5.5 to 8.5 with rne majority at 5.5. Wait. You are taking out a loan for her to pay a loan. Thats a huge NO. |
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AZ, USA
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Posted: 5/6/2024 8:53:17 PM EDT
[Last Edit: Rose]
[#25]
Quote HistoryOriginally Posted By tnwalker10: The interest rates on the loans are awful. One is 10.75%. She can pay me 4.75% and it will save her $20k over 10 years. I'm insisting she do this. 4.75% is what I'm getting from the bank so it'll cost me nothing. One of the conditions you have to meet to get Biden to pay for them is you have to have been paying on the loan for more than ten years. She's only 2 years in on some of hers. There are other requirements you have to meet and she can't meet them either. $20k/10yrs is nothing compared to the heartache you're setting up for yourself and your daughter. You need to drop this idea. |
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Posted: 5/6/2024 8:57:35 PM EDT
[Last Edit: ZuoZongtang]
[#26]
Ouch, 10% on 65k of loans is $6500 in interest the first year. Wowzer. Usury.
Go ahead and pay them off. Get everything in writing. Set up autodraft from her checking account every month. Her payment to you will be about $675/mo. A few questions. How secure is your daughers job? Does she have a retirement plan she is contributing to? Is she married? What does your wife think about this? How is your relationship with your daughter? Do you have other children that may be jealous? |
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GA, USA
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Posted: 5/6/2024 8:57:54 PM EDT
[#27]
Uh, you're taking out a loan to pay off her loan?
Yeah no, that's a terrible fucking idea, and you're gonna get fucked over somehow, intentionally or unintentionally. |
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Posted: 5/6/2024 8:58:55 PM EDT
[#28]
Gift it forget it.
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Posted: 5/6/2024 8:59:15 PM EDT
[#29]
Originally Posted By tnwalker10: To pay off her student loans. She'll repay it in 10 years. I will need insurance on her. What will it cost and will it be difficult to get? If it was 10-20k I wouldn't bother. But 65k is a lot of vulnerable money. I'm calling the insurance company tomorrow. Thoughts? Thanks, guys. Life insurance or credit insurance? |
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NC, USA
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Posted: 5/6/2024 8:59:34 PM EDT
[#30]
I have nothing to offer other than thats pretty fucking badass you can just loan your daughter $65k. Good on you man.
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AL, USA
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Posted: 5/6/2024 9:00:20 PM EDT
[#31]
Quote HistoryOriginally Posted By 18B30: Don’t. Either pay it off as a gift, or don’t get involved in her finances. 18Z50 This. If you want to get rid of a family member or friend then loan them money. ^ there's a reason that's a saying. |
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Posted: 5/6/2024 9:00:57 PM EDT
[#32]
This wont end well.
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Posted: 5/6/2024 9:01:43 PM EDT
[#33]
Quote HistoryOriginally Posted By Michaelson: A small term policy for a young woman in good health shouldn't be much at all. I'd probably price out a $100-250k policy since it'll be relatively cheap. That way, if the worst happens, there would be something to help her eventual children. 1st post is good post. |
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USA
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Posted: 5/6/2024 9:01:50 PM EDT
[#34]
Originally Posted By tnwalker10: To pay off her student loans. She'll repay it in 10 years. I will need insurance on her. What will it cost and will it be difficult to get? If it was 10-20k I wouldn't bother. But 65k is a lot of vulnerable money. I'm calling the insurance company tomorrow. Thoughts? Thanks, guys. Biden is forgiving student loans and your daughter wants to pay off early? You want to take an insurance policy on your daughter to cover a loan debt? This has to be one of the strangest posts of the day in GD and it didn’t involve divorce, horse chicks, nurses, blading at 45 or racism. Kudos. |
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Posted: 5/6/2024 9:02:20 PM EDT
[#35]
Quote HistoryOriginally Posted By tacocat: I have nothing to offer other than thats pretty fucking badass you can just loan your daughter $65k. Good on you man. Read it again. He can't, hes taking out a loan at a lower rate to pay off her higher rate loan. |
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Posted: 5/6/2024 9:02:44 PM EDT
[#36]
Quote HistoryOriginally Posted By BeRzErKaS: WHAT THE FUCK. You mean, you don't even HAVE the 65k? Full stop. This is an awful plan. Love is clouding your judgement. She needs to look into loan consolidation at a lower rate and leave you out of it. I think he means the 65k he has sitting in the bank is getting him 4.75 percent interest. His kid is gonna pay him what the bank would pay him in interest. |
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Posted: 5/6/2024 9:03:09 PM EDT
[#37]
I’m curious why she took out a loan to get a degree that doesn’t earn enough to pay it back.
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Posted: 5/6/2024 9:03:56 PM EDT
[#38]
I have never seen a student loan at those rates. Were they private loans? All of this seems like a bad idea.
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FL, USA
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Posted: 5/6/2024 9:03:58 PM EDT
[#39]
Yeah if you do this just consider it a gift of $65 Grand. Don't loan money to family. |
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Posted: 5/6/2024 9:04:17 PM EDT
[#40]
Op for clarity's sake.
You're talking about taking out a loan yourself to pay off her loans and want to purchase a life insurance policy in case something happens to her? |
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Posted: 5/6/2024 9:06:18 PM EDT
[#41]
OP you left out a bit of important info. Firstly, what is her degree in.
2. Does she now have a job using that degree to its full potential. I.e. I've seen people with teaching degrees working in a daycare for lower wages and no benefits. This is pertinent information |
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Posted: 5/6/2024 9:07:23 PM EDT
[#42]
Quote HistoryOriginally Posted By Hobs98: Read it again. He can't, hes taking out a loan at a lower rate to pay off her higher rate loan. Quote HistoryOriginally Posted By Hobs98: Originally Posted By tacocat: I have nothing to offer other than thats pretty fucking badass you can just loan your daughter $65k. Good on you man. Read it again. He can't, hes taking out a loan at a lower rate to pay off her higher rate loan. I read it as he's getting 4.75% on a money market account or some such. I doubt he's borrowing money, unsecured, for less than current mortgage rates. I could be wrong. 
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USA
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Posted: 5/6/2024 9:07:24 PM EDT
[#43]
Quote HistoryOriginally Posted By tnwalker10: The interest rates on the loans are awful. One is 10.75%. She can pay me 4.75% and it will save her $20k over 10 years. I'm insisting she do this. 4.75% is what I'm getting from the bank so it'll cost me nothing. One of the conditions you have to meet to get Biden to pay for them is you have to have been paying on the loan for more than ten years. She's only 2 years in on some of hers. There are other requirements you have to meet and she can't meet them either. Ask an accountant if this is the right move. If you rented her an apartment at a below market rent it may cause you a problem with the IRS. Is a below market interest rate loan considered a gift with a gift tax due? Just speculating. Ask an accountant. |
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Posted: 5/6/2024 9:08:18 PM EDT
[#44]
Quote HistoryOriginally Posted By JTX23: I have never seen a student loan at those rates. Were they private loans? All of this seems like a bad idea. Had to be. I checked government loans are between 5.5 and 8.5. That also means that if loans were forgiven, hers will not be one of them. |
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Posted: 5/6/2024 9:12:19 PM EDT
[#45]
Horrible idea, you are about to get fooked.
1) What's her current salary? 2) How long has she been in that field? 3) Who is going to pay her loans when she inevitably has a kid and decides to stay at home for a few years? First two answers will help HER refinance her loans to a more manageable interest rate. Third question is why you shouldn't even think about this. My parents have been bailing my sister out since 1996 when she graduated college, she'll be 50 this year and they still do. She's a very competent person with a damn good job but she never sticks in a job or house long enough to get ahead because she knows Mom and Dad will always save her. |
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Posted: 5/6/2024 9:18:11 PM EDT
[#46]
Quote HistoryOriginally Posted By Media_Noche: I'm curious why she took out a loan to get a degree that doesn't earn enough to pay it back. People have become conditioned to believe this is normal. I was just thinking about this today while walking the dogs around a local college campus. People actually believe there is no other choice. And I remember a time where you kind of needed a college degree - in anything - because HS had become useless. The difference is the degrees were things like a 2 year business degree. It wasn't expensive, but it was a sign that you were literate, which wasn't the case anymore with high school. Now that college has become subsidized through various means, like lotteries and such, it's more expensive than ever. And more useless than ever. It's become a cottage industry if debt that people have been brainwashed to believe they must participate in. It's crazy, the world we live in. |
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CT, USA
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Posted: 5/6/2024 9:18:40 PM EDT
[#47]
In this thread, I learn that most people here don’t have large student loans, nor do they understand the racket that has become college and higher education. In 2010 when I graduated college, many of my undergrad loans were hovering around 10%, with the highest at 12.75% once I graduated law school. My wife and I are both attorneys that make good money, but we had around $500,000 combined in loans when we got married. My current loans are around the 6.8% mark and continue to be paid, but I have no disillusions about not paying for what I signed on the line for. I’d do a million things differently today if I had to re-do it, but I can’t fault a parent for trying to help their child and still be on the up-and-up financially. Guess I need to pull myself up by the bootstraps and stop eating avocado toast.
OP, good on you. |
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OK, USA
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Posted: 5/6/2024 9:38:25 PM EDT
[Last Edit: GlockPride]
[#48]
If, IF, you do this seek financial planner/cpa/attorney advice. And I would pay the money directly to the student loan lender. I’m fairly certain if you gift her that much $ in one year to her, you’re going to have to pay taxes on it.
If you pay off the loans, it may not be seen as a gift. Plus, giving her the money, you run the risk of her owing you and on the student loans depending on her character choices. Also, definitely make sure she is bringing in enough money and is ON A BUDGET. You may explore helping her with other expenses every month and having her pay off the loans. |
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Posted: 5/6/2024 10:04:25 PM EDT
[#49]
Kiss that good-bye. Maybe in 20yrs. I told her brothers no loans until she paid me back, I would remove the interest. That seems to work, 15 years later. You have to remember that daughters are women/females. Risky doing family biz.
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CO, USA
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Posted: 5/6/2024 10:07:44 PM EDT
[#50]
loans to family/friends.....
good luck |
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