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View Full Version : key alternative loan


alpar80
06-03-2007, 04:59 PM
Have any of you financed your flight training with Key Bank?? I am beginning to pay this monster off and am wondering if there are any consolidation services that will eat this one? Im in deep and need to consolidate.


flyerfly
06-03-2007, 07:22 PM
I too have a Key Alternative Loan. I would suggest the book Total Money Make Over by Dave Ramsey. This book taught me to suck it up and pay the bad boy off. First off you don't want to resort to debt consolidation right now when if you cut say beer, eating out, new clothes, movies out of the budget and put it towards paying off the debt you can probably make it.

Debt consolidation really hurts your credit. Not saying its a bad thing to do but give starving a try first. I used to sit at the end of the month and wonder where all my money went. Now I sit at the begining of the month and tell my money where to go. I have 3 credit card payments, car insurance, $640 key payment, $450 rent, and a $123 cell phone bill. By sacrificing a lot and budgeting very tightly I am able to make it through first year pay. I was a TSA and now am in training at AWAC.

Get that book its amazing and a good read! Good luck!

ExperimentalAB
06-03-2007, 07:42 PM
How'd you get off with just $640?? Including Federal, I'm just a hair over $1K a month!! Arghh...

P.S. You can consolidate your loans with another Lender w/o hurting your credit - Basically turn all your payments into one if you have several lenders...they'll probably cut your interest too. The majority of my debt is SLM, but Key will cut my interest by half come this summer when I consolidate.


JetJock16
06-03-2007, 07:52 PM
I too have a Key Alternative Loan. I would suggest the book Total Money Make Over by Dave Ramsey. This book taught me to suck it up and pay the bad boy off. First off you don't want to resort to debt consolidation right now when if you cut say beer, eating out, new clothes, movies out of the budget and put it towards paying off the debt you can probably make it.

Debt consolidation really hurts your credit. Not saying its a bad thing to do but give starving a try first. I used to sit at the end of the month and wonder where all my money went. Now I sit at the begining of the month and tell my money where to go. I have 3 credit card payments, car insurance, $640 key payment, $450 rent, and a $123 cell phone bill. By sacrificing a lot and budgeting very tightly I am able to make it through first year pay. I was a TSA and now am in training at AWAC.

Get that book its amazing and a good read! Good luck!

I don't think he's talking about the same thing. Debt consolidation doesn't hurt your credit unless you seek debt relief. If you hire a company to lower your interest rates and force your creditors into your terms then yes your credit will take a hit, as it should. But if you consolidate by finding a creditor that will pay off your loan and intern give you a lower interest rate then that doesn't hurt your credit. Yes you do take the 2 point hit when the run your credit score but it will rebound in less than 2 months. This is common practice!!!!

Take a look around, it shouldn't be hard to find a creditor that will give you a better rate seeing banks what business. Key Banks as well as everyone else's rates are variable, when the new rates come out in about a month your interest rate will change again and then again down the road. Sometimes up and sometimes down. Fixed rates are for Federal loans and Key Bank loans are not Federal. My advice, don't let the payment kill you. You are allowed deferments and forbearance based upon your current situation. This allows you to hold off paying until you can afford to. Yes the interest continues to build with out any principle being chipped away but at least you can survive until 2nd year pay. Also talking to them about reduced payments. Usually creditors are inclined to allow reduced payments for a time period, make the payments interest only until you can afford more then add what you can. To them some money is better than no money!!!!

But, don't lesson to me. Call Key and explain your situation, make sure you're truthful and if you have to speak to a supervisor then do so, they can do a lot more for you than the under paid drones that work the call center phones. BTW, I have a degree in Finance but I'm no expert. Take it for what it's worth. Debt consolidation with out debt relief will not hurt your credit score. People do it all the time with student loans, including yours truly.

alpar80
06-04-2007, 01:39 AM
The rate I am paying is @ 8.25$ Vari. This amounts to close to $1000./mo which means that my whole paycheck is going to Key. On top of this I pay for my Daughter, Credit Cards (lived off of them in College), food, room rate for my base, insurance, and the list goes on... I am in forebarance and the interest rate keeps hiking up! I haven't really looked much because most of the consolidation programs are tailored to federal loans. My main question is; does anyone know of a credible bank that would buy this loan in excess of 100k? Many of the banks I have seen wont touch it. Are there any recommendations?

172capt
06-04-2007, 05:25 AM
Try sallie mae just make sure you know what rate they are giving you they tried to screw me over by telling me i was locked in at 5% but when I got the final letter before payoff it was up to 9% which was higher than the original loan was and made consolidating pointless. I was able to call them and cancel it though. I don't know why any bank would not touch it because student loans are guaranteed even if you declare bankruptcy, they can even garnish wages.

BoilerUP
06-04-2007, 06:23 AM
Holy massive debt for a 25k career, Batman!!!:eek:

You need to call Key yesterday and talk to someone that can help you adjust your repayment schedule. You also need to start talking to other lending institutions (Bank of America, Sallie Mae, Capital One, etc) about refinancing or other options! If you really have over $100k in student loan debt you need MAJOR assistance...

Every time I read a post like this, I just have to say....Thank you God for the blessings I have, thank you Uncle Sam for the $$$ that helped pay for college, and thank you mom and dad for not only helping out with tuition but for giving me the work ethic to have three jobs while 18 hours of credit in college. It sure was a PITA but no debt whatsoever besides student loans and the wife's car is a wonderful, wonderful thing. Thank you ARW ALPA for negotiating a 3% B fund into the 401k along with a nice match and thank you T Rowe Price for having good fund managers to keep that 401k and my Roth growing nicely.

DMEarc
07-29-2007, 10:58 AM
Holy massive debt for a 25k career, Batman!!!:eek:

You need to call Key yesterday and talk to someone that can help you adjust your repayment schedule. You also need to start talking to other lending institutions (Bank of America, Sallie Mae, Capital One, etc) about refinancing or other options! If you really have over $100k in student loan debt you need MAJOR assistance...

Every time I read a post like this, I just have to say....Thank you God for the blessings I have, thank you Uncle Sam for the $$$ that helped pay for college, and thank you mom and dad for not only helping out with tuition but for giving me the work ethic to have three jobs while 18 hours of credit in college. It sure was a PITA but no debt whatsoever besides student loans and the wife's car is a wonderful, wonderful thing. Thank you ARW ALPA for negotiating a 3% B fund into the 401k along with a nice match and thank you T Rowe Price for having good fund managers to keep that 401k and my Roth growing nicely.

If we were all so lucky to have mom and dad help...

KiloDelta
07-29-2007, 11:18 AM
I will be in the same situation here in about 6 months. Around 100k in federal and private student loans. I have one loan with Key, and the rest is from Sallie Mae. I plan on consolidating and deferring for as long as I need to. Its rough to have such high student loans and such crappy pay starting out, but I knew going into college that it would be like this.

At least there isn't a hiring shortage!! I heard horror stories when I first started college of people graduating with all of their ratings and their degree, and not finding a job and having to work at Best Buy just to make student loan payments.

BoilerUP
07-29-2007, 11:22 AM
If we were all so lucky to have mom and dad help...

I know I was fortunate to have had help from my folks...even acknowledged it in the post you quoted. That said, what they provided was far from a blank check.

I'm sure you want to provide as much as possible for your children's college education....right?

Airborne
07-29-2007, 11:32 AM
Does the Army still offer up to $65k in tuition loan repayment for four years of your life, and the lifetime of pride of having served your country?

Just another option.

barrydb
07-29-2007, 01:05 PM
"I would suggest the book Total Money Make Over by Dave Ramsey."
-flyerfly

I too would recommend that book!

JMT21
07-29-2007, 01:28 PM
Something else to think about: Student loans payments are only tax deductible up until you hit a certain income level - somewhere around $50k I think, but not sure (I know it's low enough that you will hit it sooner than you think). Take out a home equity loan (obviously you have to own a house) and pay off your student loans. All payments on it should be tax deductible regardless of income level.

SharkyBN584
07-29-2007, 05:20 PM
If we were all so lucky to have mom and dad help...

Yea...I guess the millions in scholarships that go UNAWARDED every year were not available to you...and only you...

DMEarc
07-29-2007, 07:26 PM
Yea...I guess the millions in scholarships that go UNAWARDED every year were not available to you...and only you...

I didn't have a problem paying for school.

I'm vouching for those of us who haven't had the most wealthiest parents.

citationdrvrmob
07-29-2007, 07:53 PM
I too battle the Key Bank monster every month, it's almost predatory lending in my mind as to how they gave a 23 year old an $80k loan without asking any questions or thoroughly explaining the repayment process. That along with the flight school selling a dream makes it hard to resist. They never explained to me the process of how your payment stays the same, even if your interest (4.0%when I signed) doubles (to 8.26% now), meaning you could very easily pay for 20 years and never touch the principal.
Two ways to help out: 1.)start paying anything you can as much as you can, even before your six month grace period ends; 2.)pay any amount over your normal monthly payment you can. After four years of payments (no forbearances or other delays), my monthly payment of almost $500 will have $15.00 going to the principal every month, given that interest rate does not go up.
I too have shopped around and have not found anyone else that will give a lower interest rate. This is because the KeyBank loan IS NOT A TRADITIONAL STUDENT LOAN. If you declare bankruptcy, YOUR KEYBANK LOAN CAN BE INCLUDED IN THE BANKRUPTCY. Thankfully, I have been able to keep my head above water, but know many who haven't. But the reason the interest rate is so much higher than our friends with subsidized federal student loans is because of the liability the lender carries in being stuck holding the bag if you go bankrupt.

Kicking the soapbox to the next guy.................................

Deez340
07-29-2007, 08:21 PM
Something else to think about: Student loans payments are only tax deductible up until you hit a certain income level - somewhere around $50k I think, but not sure (I know it's low enough that you will hit it sooner than you think). Take out a home equity loan (obviously you have to own a house) and pay off your student loans. All payments on it should be tax deductible regardless of income level.

that's a great idea! then when you get furloughed you can be broke and homeless.:D if you default or get behind on you students loans your credit will be ruined. get behind on a HELOC and they will take your house. I know this makes sense on paper as far as mathematics but i would advise against it. I also heavily recommend the aforementioned book as well.

ChinookDriver47
07-29-2007, 08:31 PM
I too have the Keybank loan. I pay 455 a month for a loan of 38k. That is about 10$ over what they want, and when the wife and I pay off her car, that additional 188 a month is getting chunked right into that loan.

I have thought about selling my soul to the devil (read: volunteer for an 18-22 month) deployment to the Sadbox to get additional pay and tax free money just to pay off the stupid little bills that I hate shelling out money for. In the desert I would make over 100k and take all of it home and be debt free when I came back.

Is it worth it? That part the wife and I are still trying to figure out.

VTcharter
07-30-2007, 05:55 AM
You may want to check out the repayment rules for the loan before you start putting in more than the minimum every month. The last contract that I read, states that there is no penalty for paying off early, however monies in excess of the monthly payment submitted per month will not go toward paying off principal, and instead wil just be deducted from what you owe on the next months payment. If this is the case, paying extra every month will pay off the loan early, but you will still pay the same in interest, as the same amount of payments will be made. I would suggest putting the extra money that you would pay per month into an interest bearing account of some sort (money market, CD, Mutual Fund)...something that will not penalize you for closing the account in five or ten years, then keep making your monthly payments. When you have enough money in the saving account, withdraw it, and pay off your loan in full. Paying off in full is the only way that you will pay this loan off without bearing the full brunt of all of the interest compounded over 20 years. Paying extra per month will not do it.

ChinookDriver47
07-30-2007, 06:00 AM
WOW, really? I am on the phone right now then to those clowns....

SkyHigh
07-30-2007, 06:11 AM
I too have the Keybank loan. I pay 455 a month for a loan of 38k. That is about 10$ over what they want, and when the wife and I pay off her car, that additional 188 a month is getting chunked right into that loan.

I have thought about selling my soul to the devil (read: volunteer for an 18-22 month) deployment to the Sadbox to get additional pay and tax free money just to pay off the stupid little bills that I hate shelling out money for. In the desert I would make over 100k and take all of it home and be debt free when I came back.

Is it worth it? That part the wife and I are still trying to figure out.

My vote is no. Sounds like an early pay off wouldn't save you much anyway. I hope you didn't do all this for flight training.

SkyHigh

ChinookDriver47
07-30-2007, 06:13 AM
Nope, I did it all for the privilege of looking cool in a flight suit. ;) ;)

citationdrvrmob
07-30-2007, 06:34 AM
The last contract that I read, states that there is no penalty for paying off early, however monies in excess of the monthly payment submitted per month will not go toward paying off principal, and instead wil just be deducted from what you owe on the next months payment. If this is the case, paying extra every month will pay off the loan early, but you will still pay the same in interest, as the same amount of payments will be made. I would suggest putting the extra money that you would pay per month into an interest bearing account of some sort (money market, CD, Mutual Fund)...something that will not penalize you for closing the account in five or ten years, then keep making your monthly payments. When you have enough money in the saving account, withdraw it, and pay off your loan in full. Paying off in full is the only way that you will pay this loan off without bearing the full brunt of all of the interest compounded over 20 years. Paying extra per month will not do it.


It sounds like KeyBank keeps evolving its contract to screw over each new borrower more and more. I signed the papers in April 2002, and started repayment October 2003. I know from my experience that after paying the monthly payment for three years, my payoff amount had gone up about $3,500 and the principal had not even been touched. After selling my house to move to another job, I was able to put some of that equity towards the loan to start working on the principal. I'm not sure about each specific loan, but in my case, paying more per month does go toward paying off principal, but only if you have already paid all accrued interest. What most people don't realize when they sign (like myself), is that when your 20 or 30 years is done (however long Key financed it), your loan will probably not be paid off if interest rates went higher than when you signed the loan. That means you will be stuck with a balloon payment to payoff or refinance.

ScaryKite
07-30-2007, 08:27 AM
You can do what I did, I saved up 1000 dollars, took it to the casino, played very conservatively at first, doubled up to 2 grand then started betting like crazy and turned 1000 bucks into 18 grand! I played off my student loans and made 3 car payments! Just a thought! It might back fire though, so you have to be willing to lose your initial cash. I know its not nearly as sound advice as consolodation, and dave ramsey books, but its what i did!

Aviatormar
07-30-2007, 08:35 AM
You can do what I did, I saved up 1000 dollars, took it to the casino, played very conservatively at first, doubled up to 2 grand then started betting like crazy and turned 1000 bucks into 18 grand! I played off my student loans and made 3 car payments! Just a thought! It might back fire though, so you have to be willing to lose your initial cash. I know its not nearly as sound advice as consolodation, and dave ramsey books, but its what i did!

Your the man, the John Wayne of Pilots, good on ya brotha, that's the american way, forget about the tradional stuff, just bet on black.

ChinookDriver47
07-31-2007, 08:02 AM
I just got off the phone with Great Lakes, the folks who actually write the check for the KAL. I am 2 months ahead in payments and am taking good size chunks out of the principle. If you can get a month or two ahead, it will save you thousands in the long run. Jesus, I hate sending that much out every month!!!

flyman304
08-13-2009, 07:15 PM
Has anyone had any luck with bankrupting the Key Bank loans. I am on my way to full Chapter 7 and need advise.

pagey
08-13-2009, 07:29 PM
hmm i thought student loans didn't count for bankrupcy?

ehe2
08-13-2009, 07:41 PM
I refinanced with loan to learn... Much better than great lakes and key. 5% fixed for 30 years. $100,000 at about $600 a month. It helped alot on first year pay.

wheresmyplane
08-13-2009, 09:59 PM
I've been researching this myself. What I've found is that student loans generally aren't dischargeable in bankruptcy, but there are certain conditions where they could be. Obviously consult a BL attorney, but it seems judges generally rely on these criteria:

1. If forced to pay back the loans it would result in undue hardship for yourself and/or your dependants
2. That hardship would last for the duration of the loan
3. You have tried to pay the loan off.

From what I've read it is pretty hard to prove that the loans provide an undue hardship. If you're out at the bar all the time and come home to watch your satellite tv, etc. They might decide you just need to cut back. One thing that would be a factor is if you or a dependant had a chronic illness (Lou Gherig's, Parkinson's, MS), it would help you prove hardship. Also, as of Jul 1, 09 - if you work in certain industries that have low pay (teacher, special ed, hospice care, etc.) you may be granted loan forgiveness - I think without filing BK - if you have been in the field 10 yrs and have been making payments. This may not apply to our situation but some might find it helpful. Also, I've read about some judges that will never discharge a student loan, and then others that do it every time. Luck of the draw, I guess.

I also would recommend Total Money Makover. The philosophies in that book are very good. He makes the point that "The borrower is slave to the lender," referencing Prov. 22:7. (Hopefully not a TOS violation right there). I don't think anybody - religious or not - can deny that that's the truth. The unfortunate truth is that student loans are acquired by people at an age when they don't really understand what it means to be in debt for that length of time. People talk about how revolving credit card debt is the worst kind of debt, but they're wrong. Student loan debt is. With no statute of limitations and such difficulty discharging student loans in BK, people who tried to better themselves are punished while the irresponsible (who bought houses they knew they couldn't pay for, or ran up cc bills buying luxury items they didn't need, all while making a Wal-Mart salary) get off scott free in BK court. Without a statute of limitations, those with student loans are lumped in with murderers and those guilty of treason. For crying out loud, even child molesters reap the benefit of some kind of statute of limitations! How messed up is that?!

Anyway, before I get off my soapbox, I would reccommend NEVER getting a student loan if you haven't already. If I had it to do over again, I would've joined the army and let them teach me to fly helicopters on Uncle Sam's dime. Nothing on earth could make me sign my life away to SLM or Key Bank again. Not in a million years. You'd be better off working at McD's the rest of your life.

flyman304
08-14-2009, 06:15 AM
I am 26 and I have a 90k Key Alternative Loan from Key Bank. The loan is in default. Last year my W-2 was 24,000. I have been also paying for some high balances on my credit card. I would have had to take 125k out but I paid for the last half of my school with my own money via credit cards. I have been reading a lot of the forums and I see a lot referring to Key loans not being federally backed and eligible for bankruptcy. I have liquidated all of my assets. I don't have a penny to my name and a baby on the way. Does anyone know how to bankrupt these loans?

Cruise
08-14-2009, 07:06 AM
I am 26 and I have a 90k Key Alternative Loan from Key Bank. The loan is in default. Last year my W-2 was 24,000. I have been also paying for some high balances on my credit card. I would have had to take 125k out but I paid for the last half of my school with my own money via credit cards. I have been reading a lot of the forums and I see a lot referring to Key loans not being federally backed and eligible for bankruptcy. I have liquidated all of my assets. I don't have a penny to my name and a baby on the way. Does anyone know how to bankrupt these loans?

Wow man, I'm sorry. Sounds like you're in a bit of a pickle at the moment. I don't have an answer for your question. But, good news is you're relatively young and you will get through this. It may take years; but don't give up.

I've got a ton of student loan debt as well. Still paying on undergrad, grad, and flight school. It burns through at least 50% of my take-home every month. Certainly tough to get ahead like this. I'm always looking for good options on refinancing.....not looking to BK my debt, after all, it's mine and I have a responsibility to pay it back....but it sure would be good to get a refinance deal. Ugh.

BoilerUP
08-14-2009, 07:52 AM
Two words - DAVE RAMSEY!

chignutsak
08-14-2009, 08:51 AM
Total Money Makeover=Life changer. Debt culture has poisoned this country. This house of cards economy that finally imploded? I rest my case.

detpilot
08-14-2009, 09:19 AM
Just ordered total money makeover thanks to you guy's suggestions. As a guy in the beginning of his grace period, do you all know of any way to view a running balance of your key loan online?

It'd be great if I could see how much interest accrues on a daily, monthly basis; as well as what my current principal balance is. Thanks!

BoilerUP
08-14-2009, 09:24 AM
It'd be great if I could see how much interest accrues on a daily, monthly basis; as well as what my current principal balance is. Thanks!

This works great for seeing things like that:

Loan Calculator (http://www.bankrate.com/calculators/mortgages/loan-calculator.aspx)

Cruise
08-14-2009, 10:23 AM
Just ordered total money makeover thanks to you guy's suggestions. As a guy in the beginning of his grace period, do you all know of any way to view a running balance of your key loan online?

It'd be great if I could see how much interest accrues on a daily, monthly basis; as well as what my current principal balance is. Thanks!


My Great Lakes (https://www.mygreatlakes.org/)

Click on the link and register for an account in the 'Borrower' tab. Then, when you're logged in, across the upper portion of the page there are a bunch of clickable tabs. Click on the IBIS (Internet Borrower Inquiry Services) tab. From there, you can follow your Key Bank loan progress/ interest rate, etc.....

detpilot
08-15-2009, 04:29 AM
Thanks!

..........................

Pilotswife4
10-05-2009, 05:11 PM
Has anyone had any luck with bankrupting the Key Bank loans. I am on my way to full Chapter 7 and need advise.

I had a friend do this, his lawyers told him they werent dischargeable, but they are. They are NOT student loans. They are ALTERNATIVE loans. Good luck!

Lab Rat
10-06-2009, 01:48 PM
Does anyone know how to bankrupt these loans?

I know hindsight is 20/20 and we all make mistakes, but since I am a taxpayer I will go ahead and share my thoughts.

You are asking how to bankrupt your loans. By doing so you are essentially saying "how can I throw this burden on the taxpayer?"

My advice? Pay what you can until it's paid off. Negotiate with the bank, take multiple jobs if you have too, but PAY FOR IT yourself. Yeah, life may be tough for a while but YOU chose to accept this risk.

I am 26 and I have a 90k Key Alternative Loan from Key Bank. The loan is in default. Last year my W-2 was 24,000. I have been also paying for some high balances on my credit card.
One advantage that you have is your age. With the right coaching, motivation and support, you could have this cleaned up in 10 years or less - and learn some valuable financial lessons in the process.

A couple of guys have already recommended Dave Ramsey's Total Money Makeover. Get it, read it, and live it!! You are probably going to have to make some radical changes in your life, but you are in a very unique and challenging situation. You are not the first person to face something like this, and you will not be the last. Many before you have conquered larger financial giants so it can be done. It is not in the least bit easy, but it is possible.