Repaying my OSAP loan

Whenever I feel like making a big purchase (i.e. planning a post-grad trip) I consult with Uncle Osap, just to see if I can justify going away for a few weeks or paying him back for all his “help”. Since I haven’t made a big purchase in a few months, I haven’t had a reason to check in with him until recently. And look at that, his website was recently redesigned.

So then I decided to try to calculate my monthly rate if I wanted to pay back my loan right now. I used their handy dandy calculator to figure it out. Things are looking grim my friends.

If I were to repay my loan in 12 months with 6% interest, my estimated monthly payment will be: $3,078. That’s a monthly pay cheque total that I haven’t been familiar with for a few summers! (In comparison, my Estimated Student Loan Interest Tax Credit will only be $336…. $3,078 a month for $336 tax credit just doesn’t seem fair.)

Oh well… I guess I will plan my trip and cross my fingers that a. I get an awesome raise at work, or b. I find a super well paying job that will pay the bills for a year after graduation.

I wrote this on 8 March 08 when I was feeling .

Comment

  1. Krishna says,

    A lot of my friends say that they will just take a mortgage as soon as they finish and pay off osap then just slowly pay back the mortgage because you can get better rates on a mortgage. Mind you I haven’t really looked into this though.

  2. tiff says,

    hey isn’t there an 8 month grace period?
    i should really look into this too…

  3. sh!ma says,

    Tiff,
    It’s a 6 month grace period, but they start charging interest the day you finish school. I didn’t know this the first time, when I finished my undergrad and was out of school for 8 months.

  4. matt says,

    yes, tiff, shima’s right. i learned this the hard way too!

  5. Jason Tsang says,

    The idea is basically to reduce the amount you owe in interest.

    You should find an MBNA deal where they give you like 0% on stuff like balance transfers for 15 months. Take out as much as you can afford (i.e. how much you are sure you can pay back by the end of the 15 months) and shovel that into an osap repayment, then build up your savings to how much you owe (hopefully in an account that gives you a good interest rate), and then repay MBNA a couple days before your 0% 15 month deal is over.

    Save on the interest on your OSAP balance (or substantially reduce your OSAP balance so that your interest is on a smaller amount), and make back some on interest at the same time.

    Just don’t go beyond your means. Every bit helps.

  6. matt says,

    This is good advice Jason! I’ll remember that when I graduate.

  7. Ramanan says,

    Krishna, the bank will give you a mortgage on the value of your house. You can’t just tell them you need X extra dollars to pay off your OSAP and your credit cards. Even if you are approved for more money then your house actually costs, you can’t just borrow the difference. If you have equity in your home, then you can borrow against your mortgage.

  8. Krishna says,

    So can you go to the bank for a regular loan? Not something on the level of a mortgage but something like a $5000 loan. What is a MBNA deal?

  9. Zhanna says,

    Guys,please, do not ever consider any low interest balance transfers from credit card companies. If you do that, any time you make a purchase on that card, which is a regular interest rate, and then try to make a payment they will put that payment towards your balance transfer and you won’t have any grace period for your purchases and interest will start accumulating on them right away (at whatever the regular interest rate is). It is all in small script in your credit card agreements.

  10. Elizabeth says,

    Twenty two years ago, I took out an osap loan, paid it back for awhile, then due to certain circumstances, I stopped paying and I’m now in default. I need to know that if I pay off my default, may I get another osap loan? I want to go back to school, and people change, and I always pay my bills on time. Also, is there anywhere online I could find out the balance of my loan? Thanks in advance.

  11. sh!ma says,

    Elizabeth, I think the best thing to do is to contact them and ask them.

    I should probably be calling them too. damn it.

  12. abd says,

    I can help you pay back OSAP in 12-18 months. People have done it and are still doing it.
    call 289 228 1910

  13. abc says,

    I work in the finance industry and can recommend a few things when it comes to OSAP. 1) Never do a transfer balance onto a credit card regardless of the introductory rate. 9.9 times out of 10 you will lose the battle here and end up paying a lot more on the loan. 2) OSAP is at a floating rate of prime+2, most people (especially if you’re renting or living at home) won’t be approved for a loan through a bank and if you are, will be at a rate of probably 6 and up, unless you secure it to the house then you should be getting something around 2-3%. 3) The interest charges on an osap loan are tax deductible, that’s why they send you a year end statement so you can claim the interest on your income tax. All in all, if you are having troubles with repaying your student loan, I believe you can have up to 7 years without starting to pay it back, give them a call and they can help you out. Never go through a bankruptcy, credit counselling or consumer proposal to pay it off evening though credit counselling and consumer proposal aren’t actual bankrupts, they are considered under the bankruptcy act and you will have that on your credit bureau report for up 7 years.

  14. frugal.and.debtfree says,

    Hey Sh!ma, cool website. Have you ever tried applying for repayment assistance, living at home and then accumulating whatever you dont have to pay to OSAP in a savings accounting and when you dont qualify for repayment assistance pay them in a lump sum. It may take you a bit more than a year, mayne 2-3, but its worth a shot

  15. frugal.and.debtfree says,

    I have $65,000 in student loan debt, so I definetly feel you sentiment. But I am learning alot… after the fact.

    If anyone is looking for some advice on paying back their student loan, check out my website at http://simplyborrowing.blogspot.com

    Website updated weekly

 
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