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Student Loans

March 24th, 2018 at 12:00 am

Up late and checking balance dues. While doing so, I noticed that if I select auto payment for my student loans, my loan rate will reduce by .25%. It's not much but it's enough to save me some money so I'm signing up.

I also noticed that even though I pay every month my loan balance is increasing. I pay only the minimum, but shouldn't it go down a little? WTH? This makes me so angry, I now want to tackle this debt before the CCs. I know I'll be out of order of the baby steps but this is absolutely ridiculous. I think, well I know, I'm going to change somethings around regarding my monthly goals. Right now it's to save $200 a month to the EF, I'm still going to this. It's not part of the steps but it gives me comfort; being able to cash flow some things, such as my $300 car repair is better than accumulating more CC debt. Once I get BS1 to $3k I can stop adding to it. After looking at my loan debt, I'm going to add a monthly goal to pay an extra $100 on the loan. I'm going to revamp my budget.

Goals revamp
* Yearly pay down debt, stick with a budget
* Quarterly pay off one CC (four for the year)
* Monthly save $200 and pay $100 on student loan. Read one nonfiction book 📚 preferably on finances
* Daily get a little exercise in

Since I'm not going on vacation, I'm not sure what to do with the money. I feel like a) I should throw it at debt, it's about $40 a month. Or b) keep adding to it, to give myself a little me time one weekend. I'm so tired and I'd love to check in, at a hotel on the beach 🌊 and just unplug. All by myself. Or c) purchase that laptop I've been wanting and not needing. I'd love a laptop that I can carry with me. I can use it to work on my budget while I'm away or in bed. It's more for convenience.

Lastly one of my coworkers birthday is coming up. I really like her. She's planning happy hour 🍷 Monday but I've already blew through my fun money, for another coworker. This is where discipline comes in. I'm going to have to let her know that I just can't make it. I have nice bottle of wine 🍷 that I'm going to give her as a gift. I do have the vacation club money and the buffer in the checking but I just can't do it. I don't want to get in the habit of shuffling money around. I'm just going to let her know that I can't make it.

Update to post. So apparently there are rules in my student loan agreement that, require that outstanding interest and late fees (if applicable*) must be paid first, prior to a payment being applied to the loan principal. I check my loan balance and notice that it was going up vs down. I know Dave says to pay the smallest to largest debt first but the way things are going, I'll be in a 100k student loan debt if I don't pay this off.

I have one of two options for the extra payments and need your help.

Standard Allocation
(Most common)
* Once scheduled monthly payment and all outstanding interest has been paid, excess will be applied to the loan with the highest interest rate, thus costing supposedly costing me less interest over time. 
Done automatically.
Custom Allocation
(Least common)
* Once scheduled monthly payment has been paid, excess will be applied to the specific loans of your choosing. I set up manually.
* Here I can allocate how much of the excess payment is applied to the interest and how much is applied to the principle

10 Responses to “Student Loans ”

  1. creditcardfree Says:

    Tells us more about all your interest rates on cards and student loans. What are your minimum payments? It sounds like your student loan payment that is required doesn't cover the interest that is accumulating.

    Try the calculator's at What's the Cost to see if that helps figure out what order to be paying your debts. I'm sure there are other apps that help you figure out the snowball order, this is just the one I know of from years ago.

    Dave Ramsey has you start with the smallest to build momentum and have successes in the beginning. If he told you to start with your student loans, you would get discouraged fast because it would take years before you finally paid off the debt. And you have seen that have success early does work.

    If you want it to be about the math you need to do calculations.

  2. Amber Says:

    I realized after further research that it's because my payments are based on income 🤦🏾‍♀️🙄, I can't afford the $600 a month payment.
    I've got to figure out how to throw extra on this thing

  3. alliecat79 Says:

    I feel the same way about my federal student loans. They never go down!!! Even if you add a small amount, say an extra $10 or $20 per payment, that will go a long way and make you feel good. It's still always best to focus on those credit cards first. It's a tough pill to swallow, but think about how much extra you will have to throw at those loans once those high credit card payments are gone!

  4. Rachael777 Says:

    Creative idea I will do once I settle this 2 flat is to get one of those 18 months zero interest cards (or some have a 3% fee up front) and use that to pay for school. I will be switching to that next semester vs student loans which for me (masters) charge 6% PLUS a 1% fee but have total deferment while I am in school

  5. Out of the Dark Says:

    Bundle....by that I mean what debt can be consolidated at a lower rate. Meet with a banker and gather option s for a consolidated loan. Often times you are even able to claim the interest paid. I wouldn't suggest it if you were not doing so well on your debt reduction focus. Also, way to go on the declination of happy hour. Those celebratory days will cone, just not now if outside of budget.

  6. creditcardfree Says:

    Amber...this is a reason to not buy a home until you are complete with your debt. Your student loans are increasing everyday. I would stick to the plan to pay off credit cards asap. Don't keep talking yourself into saving more. These debts are a major emergency!!

    It's hard to keep all the details straight of others debts, so I may be forgetting details. I'd more than likely use any proceeds from your Dad's home for debt and debt alone. If you need to fund some very minimum sinking funds or buy a slightly newer vehicle, do that if it will help avoid future maintenance costs. But the rest to debt. Buying a home with as much debt as you have is not a good idea.

    Consolidation of loans is a good idea IF you can handle the payment and the interest rate is lower. But if you pay fast none of that will matter in the long term. Go watch some more YouTube videos of people who are working on paying off debt. Freedom In Budget is good, and Budget Girl. Both will have mention of others on the same journey to be debt free following the Dave Ramsey plan.

  7. DW Says:

    OMG, CCF addressed the elephant in the room (or in this case, on the blog).
    Yes the condo/villa is a good price, but nothing is a good price if you get in and financially you’re not making progress.
    Also during the 2008 housing crisis, a lot of homeowners losing their home stated they thought because the bank gave them a loan, they could afford the payment.
    “Murphy” has been riding in your car and “Murphy” will move in with you once you buy the villa.

  8. Bluebird Says:

    I was going to say the same thing as CCF, buying the villa is not a good idea with the debt you have. You're doing a fabulous job paying it off. Keep your living expenses as low as possible and continue paying the debt and student loans off. Just think, in time, it will all be paid off, then you can buy a home with no other debt to be paid!

  9. Trying to get ahead Says:

    Amber, I mentioned this in a comment in the past. If you really want to move and have your own place, is there something stopping you from living in your father's house (if it is paid off free and clear) so that you can save on rent/mortgage payments and then accelerate your debt payments? It may be a good short-term solution for you.

  10. Trying to get ahead Says:

    Amber, I mentioned this in a comment in the past. If you really want to move and have your own place, is there something stopping you from living in your father's house (if it is paid off free and clear) so that you can save on rent/mortgage payments and then accelerate your debt payments? It may be a good short-term solution for you.

    Also, like Out of the Dark says, either consolidate the debt or maybe look into re-finance the student loan.

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