Comments for Smash Student Loan Debt at http://www.dailyworth.com , comment 1 to 24 out of 20 comments http://www.dailyworth.com Thu, 09 Sep 2010 14:28:55 +0100 FeedCreator 1.7.3 http://www.dailyworth.com/blog/427-smash-student-loan-debt#comment-4330 Where does a honest woman who is on SSI make any real money online? - jennymelissa Wed, 25 Aug 2010 20:07:00 +0100 http://www.dailyworth.com/blog/427-smash-student-loan-debt#comment-3818 We're following a similar approach and it really does work. By the time my husband and I both finished undergrad and grad degrees, we had $225,000 in student loans spread across 17 loans (our only non-mortgage debt). I built this great spreadsheet and we've been tackling and tracking loans based on the higest rate ones first. Every month we first save some money, then pay bills, keep a small cushion in checking for emergencies and then send everything else to the loans. I graduated in '07 and he in '08 and right now we're down to $105,000 due (12 loans). We were fortunate to get good jobs (though did see recession salary cuts) but we also cut out a lot of expenses (no cable, used clothing, entertainment via library/hulu/redbox, craigslist, one car, etc.) and anything extra (bonuses, raises, tax refunds, etc.) goes to loans. Seeing the loans go to zero balances is well worth the cutbacks! - MW Wed, 28 Jul 2010 07:38:26 +0100 http://www.dailyworth.com/blog/427-smash-student-loan-debt#comment-3245 Does anyone know the difference between the Income Based Payment plans and the Income Sensitive plans? From what I understand one of them you have to pay interest on what is left over after 30 years, and might have a penalty for exiting the program if you start making more money. I have $100K in loans and I want to pick the best payoff. - Sarah Fri, 25 Jun 2010 06:03:19 +0100 http://www.dailyworth.com/blog/427-smash-student-loan-debt#comment-2994 WOW!! Sometimes, the simple things are overlooked. Isn't it that they way it is with most things in life? I have heard of paying your mortgage payments every two weeks...but your credit card? What a concept, I like that A LOT. I am going to implement this one. - Adalia Thu, 17 Jun 2010 09:03:39 +0100 http://www.dailyworth.com/blog/427-smash-student-loan-debt#comment-2373 This is very similar to what my husband and I are doing. Two years ago, he refinanced his student loans to a 30 yr for a loan that was around $60K. He had a low salary and so he thought he could only afford the lowest payment. Since that time, we've gotten married and made a concerted focus on paying off that loan. That's our only debt and we have an emergency savings. He got laid off for about 6 months last year and we still continued to make payments. The principal has gone down to $39K. By putting as much as we do onto the loan, we will have it paid off in about 4 years instead of 30 and will save about $70K in interest. I highly recommend over-paying your loans. Every bit you can afford to pay above your monthly payment will shorten your loan and save interest. It's not easy, but it's really worth it! - christy Tue, 11 May 2010 02:06:50 +0100 http://www.dailyworth.com/blog/427-smash-student-loan-debt#comment-2368 Thanks for the advice! I'm actually considering going back to school but in the mean time i need to set-up a strategy to lower my student loans. I will definitely use this insight and apply this method! - Alex Tue, 11 May 2010 00:41:04 +0100 http://www.dailyworth.com/blog/427-smash-student-loan-debt#comment-2367 another note! this time about refinancing. this may only work for credit cards though. i just recently did a secured loan for most of my credit card debt using my car as collateral. it dropped my interest rate from mid to upper twenties to around 7%. the lower interest saves me money and helps me pay it off faster. I don't think it would help much for student loans since most of the time the interest rates are lower. - k Mon, 10 May 2010 11:18:49 +0100 http://www.dailyworth.com/blog/427-smash-student-loan-debt#comment-2366 just a warning about bi weekly payments. check with the company that you have your loan/creditcard from if you have auto pay. i have most of my bills set up for auto pay, even credit cards. one of my cards takes the scheduled minimum payment on the due date regardless of what was paid earlier-even if it was the minimum payment amount. since this is the account that is now receiving the avalanche and snowball payments for me it doesn't really matter. still I have it scheduled for the minimum payment on the due date and then I calculate in my budget to make an extra payment in between. check to see what your creditor will do and how it is best to schedule automatic payments if you're using them. - k Mon, 10 May 2010 11:14:50 +0100 http://www.dailyworth.com/blog/427-smash-student-loan-debt#comment-2364 Making weekly payments will make the interest go down even more for stundent loans, credit cards, and your mortgage. - Jacqueline Stout Mon, 10 May 2010 08:56:24 +0100 http://www.dailyworth.com/blog/427-smash-student-loan-debt#comment-2363 I am going with the low-Balance method. I am tackling two debts at a time, paying bi-weekly. I have 6 more debts to kill. I am guilty though I never use my tax refund to pay bills or any extra money I get to pay down debt. I use that for my children, and for the home and car extra things, like appliances, clothing, oil change. Oh and I take my children out to eat and to a movie. Once a year I get to splurge on my children, so I go for it. But all 11 months I pay my monthly bills on time and tackle the debt I got myself into. Its rough because I have to tell my kids no all year except for in April when I do my taxes. But it gives them something to look forward to. But the upside of that is if they want to do something really bad, i showed them how to work for there extra money, like selling cupcakes, or lemonade stands, or rummage sales. And thay appreciate the money they get and are learning to spend more wisely because of it. But back on track. I am probably gonna take about 7 years to pay my debt off. I tracked my bills to December 2010, and I have a long way to go. Total my debt is 29,000.00+ Most of them are smoall debt under $1000.00, but Its just tackling them and getting them paid off. Thank you again dailyworth for the tips, aid and everything, I wouldn't of done it without your help. - dreamcatcher09 Mon, 10 May 2010 08:29:13 +0100 http://www.dailyworth.com/blog/427-smash-student-loan-debt#comment-2362 Kenia -- thanks for your feedback! - Olivia Mon, 10 May 2010 08:23:16 +0100 http://www.dailyworth.com/blog/427-smash-student-loan-debt#comment-2361 This seems like a great, and simple strategy! I look forward to sharing it with the many young professionals I know struggling with student loan debt! - Kelsey Halling Mon, 10 May 2010 08:11:26 +0100 http://www.dailyworth.com/blog/427-smash-student-loan-debt#comment-2360 For everyone: Here's the link to a free excel spreadsheet I found online. This is what I used this to aid me in my calculations: http://www.vertex42.com/Calculators/debt-reduction-calculator.html - Kenia Mon, 10 May 2010 07:40:26 +0100 http://www.dailyworth.com/blog/427-smash-student-loan-debt#comment-2359 @ Melissa, What I call 'loan 3' was actually several federal loans that I consolidated into a fixed rate of 3.19%. I tried to see if I could include the variable 6.375% loan in the consolidation (it was over 8% interest at the time, right after college), but the one offer I got basically lowered my monthly payments but increased the interest rate to 10%. Right... I don't know why they bothered to waste trees on printing me the application packet. Why in the world would I want to do that?? So, alas, that one is still variable, and I have not been able to get a lower interest rate. If you do find a way to refinance you should let us all know! @Olivia, hhm....If you are fairly certain you're going to get out of the public sector before the 10 years is up (so there won't be any forgiveness of your debt in the future), I would recommend paying it off as quick as you can afford to do so. OR, you may also look at what would happen if you did work there for 10 years: See how much money you would be paying over the course of those 10 years doing just the minimum payments, and see how much money you would end up paying if you paid it off sooner than 10 years. Then pick whichever way you're making the most savings. But those are just my two cents, since I'm not really a financial advisor or qualified to give financial advice. I say give it good thought, work out the numbers, and get input from a financial advisor. @Miranda, I was making some headway on loans 1 and 2...but not on loan 3. Even though I have always made every one of my minimum payments, all those payments for loan 3 went towards just the interest. In fact, I actually saw that my principle loan balance INCREASED from my original borrowing amount! Looking at the calculations, it would have eventually gone back down and, over several years, been paid off. But seeing my loan balance go up, rather than down, because of interest combined with such a high balance, was just disheartening (Especially since my payment was more than $300/mo.!) It felt like I was going backwards! - Kenia Mon, 10 May 2010 07:39:05 +0100 http://www.dailyworth.com/blog/427-smash-student-loan-debt#comment-2358 Great strategy! I have a colossal student loan of my own to repay as well and my strategy is very similar to yours - tackling the loan with the highest interest first. (my highest rate is 7.65%, yikes) One other thing I am doing as well is to make sure the payment amounts are as low as possible on all loans beside the one I am targeting. (You can do that by choosing the longest repayment term possible for those loans) In doing so, you can free up the max amount of money (if you have a set budget for student loans like me) to repay the target loan! - Erica Mon, 10 May 2010 07:25:26 +0100 http://www.dailyworth.com/blog/427-smash-student-loan-debt#comment-2357 ok, but so how to handle two large credit card debts + large home equity line. which one to focus on first?? totally overwhelming! - karen Mon, 10 May 2010 07:23:08 +0100 http://www.dailyworth.com/blog/427-smash-student-loan-debt#comment-2356 Any thoughts on consolidation? - Bethany Mon, 10 May 2010 07:19:51 +0100 http://www.dailyworth.com/blog/427-smash-student-loan-debt#comment-2355 I was fortunate to go to college when the pricetag was much lower (late 1970s-early 1980s). However, what with my pathetic early salaries in a modest-paying field (publishing), paying off the loan was still a burden to be reckoned with. Please clarify: When I was paying mine off, they gave me ten years from graduation (there may have been a short grace period) and spelled out exactly what the minimum was, and if you paid that steadily, after the 10 years the loan and interest would be paid in full. So I don't understand what you mean about not really making any headway; if you pay monthly the figure requested, wouldn't the debt be paid off in the time frame allowed? That said, your plan is great: I figured out the snowball method myself regarding other debts and it definitely works, so stick with it. I also pay off the smallest debt first, and it's very gratifying. Don't forget to take some other advice from Daily Worth, though: Make sure to save just a little each month, a la "pay yourself first." I'm saving $25 a month basically from dollars and coins found in pockets, purses, and behind pillows! - Miranda Spencer Mon, 10 May 2010 06:55:13 +0100 http://www.dailyworth.com/blog/427-smash-student-loan-debt#comment-2354 Hey there! Congrats on finding a workable plan!! I'm inspired :) That said, I'm sort of new to Daily Worth (loving it!) and I have a question about student loan debt. Any advice would be welcome. Here's the details: After undergraduate school and a few grad degrees, I've found myself $71K in debt (breath... oh my, that number gives me huge anxiety!). I only make $50K, but I work in public service, which falls under the make-120-monthly-payments-loan-is-forgiven plan. Awesome, right? (as long as I stay in public service) Well, I also got a break on my monthly payments due to my monthly income. So, my question is, do I make my lower monthly payments (which are still no small change), continue to work in public service for the next 10 years (which I could do, but I'd really like to branch out and do something more creative -- which I do on the side now), and then let all the rest of that money be forgiven? For some reason, it still gives me intense anxiety that there's this huge number lingering out there... (and I also feel like I'm "cheating" somehow by taking a supposed easy way out). Any advice? This is my only debt. I have no credit card debt, no car payment, and I'm a renter. Ideas? Suggestions? Thanks, Olivia - Olivia Mon, 10 May 2010 06:54:23 +0100 http://www.dailyworth.com/blog/427-smash-student-loan-debt#comment-2353 I'm busy paying off my husband's last school loan. Unfortunately, it is only one loan and I am not allowed to refinance the loan to get a lower interest rate. If you have any good advice, please pass it on. I've succeeded with my mortgage payments. I started with a 30 year mortgage. I was able to refinance for lower interest rates years ago when they first dropped. Instead of dropping my payments, I increased my amounts slightly and dropped to a 15 year mortgage! In addition, I started making payments every two weeks. This dropped interest on 1/2 monthly payments and added a extra monthly payment over the whole year. My mortgage dropped to 12.5 years! I will be 39 years old and completely own my home! These tips really work! - Melissa Mon, 10 May 2010 06:50:43 +0100