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Started By
Message
re: Student Loan Planning/Strategy
Posted on 12/25/14 at 11:13 pm to Buckeye Fan 19
Posted on 12/25/14 at 11:13 pm to Buckeye Fan 19
My fiance and I used the Dave Ramsey Method to knock out her Student Loans. 10 year plan just like yours. We paid 19k off in just 6 months. We did have some savings that we used and I worked a TON of OT for extra cash but its such a huge burden lifted off of us.
B: $2,500 at 6.8% (Unsub Stafford)
A: $4,300 at 6.8% (Unsub Stafford)
E: $5,500 at 3.9% (Sub Stafford)
D: $5,500 at 3.4% (Sub Stafford)
C: $7,500 at 6.8% (Unsub Stafford)
This is the order that I would make the payments based on what we have already done.
Take your $100/wk and start on the $2500 loan.
If your normal monthly payment for this loan is $20 (just guessing), then you would be paying $420/mo on this loan and would have it paid off in 6 months.
Then take that 420 and add it to the next loan, which in this case is 4300.
Im guessing the minimum payment for that one is $50-$60, so you would then be paying $480/mo on the 2nd loan. If your balance on this loan has stayed the same b/c of just making minimum payments, you can have it paid off in an additional 9 months.
Keep adding your $400 + minimum payments to the next loan, etc etc till they are all gone.
if you can add more than the $400 it really speeds up the process.
I would highly recommend the debt snowball based on personal experience.
We've also paid off an $8000 personal loan that I had taken out by continuing the payments we were making on her loans.
B: $2,500 at 6.8% (Unsub Stafford)
A: $4,300 at 6.8% (Unsub Stafford)
E: $5,500 at 3.9% (Sub Stafford)
D: $5,500 at 3.4% (Sub Stafford)
C: $7,500 at 6.8% (Unsub Stafford)
This is the order that I would make the payments based on what we have already done.
Take your $100/wk and start on the $2500 loan.
If your normal monthly payment for this loan is $20 (just guessing), then you would be paying $420/mo on this loan and would have it paid off in 6 months.
Then take that 420 and add it to the next loan, which in this case is 4300.
Im guessing the minimum payment for that one is $50-$60, so you would then be paying $480/mo on the 2nd loan. If your balance on this loan has stayed the same b/c of just making minimum payments, you can have it paid off in an additional 9 months.
Keep adding your $400 + minimum payments to the next loan, etc etc till they are all gone.
if you can add more than the $400 it really speeds up the process.
I would highly recommend the debt snowball based on personal experience.
We've also paid off an $8000 personal loan that I had taken out by continuing the payments we were making on her loans.
This post was edited on 12/25/14 at 11:16 pm
1
Posted on 12/26/14 at 7:37 am to pakowitz
Not a fan of paying off stu loan debt to the exclusion of building up a cash reserve and doing a retirement contribution. OP has just $25k in debt: that's equivalent in dollars to car, or a tiny starter house. stu loan debt isn like consumer debt--depending on your income, some of the interest paid is tax deductible.
First off, investigate the loan forgiveness options offered by the govt. certain kinds of jobs (teaching, public service for a government entity, work for a 501c3 nonprofit, including most universities, etc) may qualify you for a loan forgiveness program. If you are qualified, you make 120 minimum payments, then the balance is forgiven.
Second, figure out how much cash you can devote to debt payment, to establishing a cash reserve, and to a retirement contribution. Don't completely neglect any one category over the other. Sure, pay on those loans, but it is equally important to save for retirement, especially while you're young. It is also good fiscal discipline to learn to balance multiple smaller goals, rather than blindly flail at one big symbolic one (those stu loans) while ignoring other important aspect of your financial well being (your emergency cash and retirement; with a Roth IRA, the retirement cash and cash reserve can be in the same account).
Debt isn't a disease....lack of self discipline is. Don't run up unnecessary consumer debt at this point (car, house, stuff), keep plugging away while saving for emergencies and retirement, and it will all be paid down in a few years.
First off, investigate the loan forgiveness options offered by the govt. certain kinds of jobs (teaching, public service for a government entity, work for a 501c3 nonprofit, including most universities, etc) may qualify you for a loan forgiveness program. If you are qualified, you make 120 minimum payments, then the balance is forgiven.
Second, figure out how much cash you can devote to debt payment, to establishing a cash reserve, and to a retirement contribution. Don't completely neglect any one category over the other. Sure, pay on those loans, but it is equally important to save for retirement, especially while you're young. It is also good fiscal discipline to learn to balance multiple smaller goals, rather than blindly flail at one big symbolic one (those stu loans) while ignoring other important aspect of your financial well being (your emergency cash and retirement; with a Roth IRA, the retirement cash and cash reserve can be in the same account).
Debt isn't a disease....lack of self discipline is. Don't run up unnecessary consumer debt at this point (car, house, stuff), keep plugging away while saving for emergencies and retirement, and it will all be paid down in a few years.
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