Well for starters I work at a bank so i fee kind of dumb asking this question. Just recently i graduated with my MBA and it cost me about $61K. Right now the loan is with sallie mae at a 5.5% consolidated interest rate. My job has offered to lend me $50K at a fixed 7.25% rate for 5 years. For each year I stay with the bank, they will forgive 20% ($10K) of the loan. In the mean time, i pay interest only on the outstanding balance. If i quit, the loan basically becomes due in full .

It should be a no brainer since this is like makine 10k extra a year, but I'd feel like my work will own me during those five years.


what should i do??

 

what if you get fired?

 

become a male giggalo but im all seriousness, student loans always take time to pay off no matter what. your education was a investment. that bank job sounds good but that just means you cant advance anywhere except within the company for the next 5 years.

 

Two words....indentured servitude.

I would read their fine print. See if their is a clear path laid out for advancement. If you're good enough, you can always get a new company to pay off your loans etc.

It's a gamble. I'd just ask them to pay me that much more per year. It's unrealistic to tie someone in to what is essentially a contract for such little compensation.

 

How confident are you that you'll be at the bank in five years? Certainly its a deal if you basically only have to pay interest on the loan over five years and don't have to pay any principle.

I don't know your salary, but if you took it during that time save cash like you were going to have to pay the loan in full. You could even invest some of that cash over time and make money on it. If you are going to take it you better make sure that you find a way to save up 50k+ interest during your time at the bank, that way you can partake in the deal, but if things go sour you can still be covered.

It sounds like you are actually working at the bank? If that is true I find it funny that an mba that works at a bank is asking finance advice ;-)

I keeeed, I keeeed :-)

 

[QUOTE=Kekoa,Sep 27 2006, 06:55 PM] Well for starters I work at a bank so i fee kind of dumb asking this question.

 

If you can quit in 1 year and only owe $40k, or $30k in 3 years, I would totally go for that.

 

This sounds like a good plan. You're covered either way. If you quite before five years and were socking money away and earning interest, consider that a perk that most people paying on student loans don't get.

 

Or $30K in two years, which is even better.

 

Thats exactly how the plan works. Each year I stay with the bank, I get $10K forgiven from the loan. After the 1st year with the bank, I will owe $40K, after the 2nd year $30K....etc..... If I am here for 5 years, I basically owe nothing from the $50K principal I borrowed.

I think I will do it. I figure its like making an extra $10K over my regular salary and bonus. Plus, its basically not taxed and I can write off the interest.

wooot.