Recent Law Grad Needs Advice

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Recent Law Grad Needs Advice

Postby jakeadair2 » Tue Sep 08, 2015 12:06 pm

I have a slightly complicated situation I was hoping someone could help me with. I am a recent Law School grad in May of 2015. I don't start work until Sep 28 of 2015 (it is Sep 8 today). To put things simply, I have run out of money this summer while studying for the bar, but won't get a real paycheck until late October. I have to pay rent, buy gas and move, etc...

So I have a lot of student loan debt (expensive law school, a little regret). Around 140k. However I am taking a public sector job and will end up with a Pay as you Earn repayment plan meaning a monthly payment of 250 or so. I also have a private bar loan for the summer of 16k (which went to rent, bar classes, bar registration cost, living, and buying an engagement ring for my fiance).

In terms of credit cards I have a Discover (who also did my Bar Loan) for $1500, nearly maxed out. I have a B of A for $5k, nearly maxed out. I have a Wells Fargo Shane Co with a credit line of 5.3k, but this is completely paid off/unused.

So when I start work, I will get a consolidated loan and have payments of about $250 on my federal student loans, and about $250 on my private student loan. I will also begin paying off my cards with all extra cash.

I applied for a Chase CC yesterday, and was denied because my obligations were too high compared to my income. I tried to recon and was told it was my student loan obligations that were too high. I should have thought of that, but did not because my student loans are not in repayment period until November. However, under the standard repayment plan, my monthly payment is $1600 or so (which I obviously could not afford). The only way to show the lower monthly payment (income based repayment) is to actually accelerate the repayment period, so I don't want to do that now.

My question (long winded, my apologies): what is the best chance for me to get a little credit to live on for the next month or so?

Should I look for a credit line increase from discover or B of A? Should I apply for a card with Wells Fargo and attempt to transfer some of my credit line? Should I apply for a new card somewhere else that maybe won't consider my student loans as they are not in repayment? Should I find a cosigner (my mom cosigned my B of A card)? I am wary of adding any more hard inquiries to my credit report, especially if they will all come back saying "obligations too high compared to income."

Put simply, what is my best chance of getting at least 1.5k in credit to last me until my paychecks start coming in? At that point it will be all repayment for a while, but I literally have sold off what I can and still need money to live...

Thanks so much for your time, look forward to hearing from you?


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Re: Recent Law Grad Needs Advice

Postby Kevin86475391 » Tue Sep 08, 2015 4:26 pm

Hi Jake,

Welcome to the forum and congrats on finishing law school! I don't think you mentioned it, but since you're going to be working in the public sector in addition to the income-based/Pay as you Earn repayment plan, do you think you might also qualify for student loan forgiveness for your public loans in a few years? That certainly sounds like it would be a great deal if so! I'm sure you've already looked into that, but thought I would mention it just in case.

Anyway, regarding your situation, again I assume you've already explored these options, but if possible I'd recommend against more credit/debt at this point. Since you only have to make it to late October might it be possible to cut expenses and get help from your fiance, mom, or other family members? I know it's not ideal, but given the temporary nature of the situation it might be the best solution if it's possible. You could even keep a sort of 'tally' and repay them once the money starts coming in.

Failing that though, if you already have an approved credit line of 5.3k with Wells Fargo and only need about 1.5k, what's stopping you from simply using that? Unfavorable interest rates?

If the unused Wells Fargo credit isn't an option I would suggest calling up Discover and asking them if they can do a soft pull to see if you qualify for a CLI. Definitely don't do it online. Call and talk to a credit analyst and fully explain your situation. You could also of course try the same thing with BofA. Personally I'd go with Discover first, but perhaps that's just because I'm biased in favor of Discover since they're my favorite lender and I've had unilaterally good experiences with them. BofA's been a great creditor to deal with in my experience too though. Anyway, they'll probably both tell you it will need to be a hard pull to see if you qualify - but it won't hurt to ask first if a soft pull is possible. I've never asked either company for a CLI with such high utilization, but to be honest I don't think your chances are that great. They'll almost certainly be much better with a live analyst though and both companies have great customer service. While on the phone with them you may also want to ask about a very small personal loan.

Speaking of personal loans, would there be a credit union - perhaps affiliated with the school you just graduated from - that you could go to and apply for a small personal loan? Another option would be a peer-to-peer lending site like Prosper or Lending Club.

Finally, would it be possible to get a short-term job until you begin work in late September? I know that means it would only be for 2-3 weeks, but you may even want to consider keeping it going an additional month or so as a part-time job until your income does get fully rolling in late Oct. You might try a temp agency if that's an option in your city. When I graduated from college and moved I briefly used one and they were able to get me a placement fairly quickly and the nature of the work is such that the employers aren't expecting you to stick around more than a few weeks. The one I used also paid me weekly rather than bi-weekly, which I think is fairly common for these types of agencies. So that means you won't have to wait as long to see some cash. Of course these jobs probably won't be the best and if you do keep one as a part-time job at first when you start your main job, I know that'll be extremely exhausting and all around sucky, but it might be worth it in the short term.

So to review my advice in order of preference would be:
-Cut expenses and get help from fiance, family, or even friends
-Get a short-term and/or part-time job
-Use the Wells Fargo credit line
-Try to get a CLI with Discover and BofA, and definitely try to do soft pulls if possible
-Ask the Discover/BofA analyst about a small personal loan (they may need to transfer you of course since they'll be in the credit dept.)
-Explore your options for a personal loan with a credit union or peer-to-peer lender.

Anyway best of luck!

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Re: Recent Law Grad Needs Advice

Postby Vermonster » Wed Sep 09, 2015 9:01 am

Your chances of additional credit cards are very slim. As you said Chase is seeing your student loan payments as $1600, and most other lenders will see it the same way.

I think your best bet is a personal line of credit. See if you can get one through a credit union or BoA (as you have history with them). If you have any paperwork from your future job you can use that to show that you are employed and will be making $X. Also bring any paperwork showing what your loan payments will be when you start working.

A CLI is going to be tricky on your cards with high utilization, but is worth asking for. Even a $1000 would help. You could potentially try applying for a more lenient creditor like Cap one, but I would use that as a last resort.
Chase Freedom $9k~~Chase Sapphire Preferred $6.5k~~Amex Blue Cash Preferred $12.4k~~Citi Double Cash $4.7k

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