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Home > Going to start chipping away at student loan

Going to start chipping away at student loan

July 18th, 2013 at 02:02 pm

The last credit card payment is scheduled for August so I have begun sending extra payments to the student loan this month. $500 extra per month just makes the 2 large payments later a little less massive.

Thanks to the purchase of the road bikes, our summer spending has been very low, close to winter levels. We are too busy biking to spend money. Another month like this and the bikes will have paid for themselves in reduced spending.

Did the math and the car loan is not going to get paid off this year, it will have to wait till the end of next year as originally planned. It sets back too many of my other goals for 2014. You would think that freeing up the monthly payment would be beneficial but it just doesn't pay back quickly enough to justify it. Too many things need to be funded in spring 2014. Ah well, I knew it didn't make financial sense but it would have been nice.

Posted in Musings | 4 Comments »

4 Responses to “Going to start chipping away at student loan”

  1. SecretarySaving Says:
    July 18th, 2013 at 03:32 pm 1374161546
    1374161546

    Instead of putting the extra on the student loans have you given thought to putting that money towards the car loan to get it paid off?

  2. Caoineag Says:
    July 18th, 2013 at 03:57 pm 1374163052
    1374163052

    Car loan interest is 1.75%, student loan interest is 5.15%, both with similar balances. Car loan will be gone come December 2014, student loan would linger on its own til 2016. No contest for me, I want the student loan gone.

  3. snafu Says:
    July 18th, 2013 at 05:24 pm 1374168243
    1374168243

    Great to accelerate pay down of SL. Do you need to make any special arrangement to ensure the extra sum is applied directly to the principal as opposed to 'pre pay' or their specific terminology?

  4. Caoineag Says:
    July 18th, 2013 at 06:30 pm 1374172251
    1374172251

    I reviewed their payment language when I scheduled the payment and it looks like, if there is not interest currently due, it all goes to principal. Which is good, because you don't have a choice of where to pay at all. Back before I consolidated, my attempts at payoff resulted in no balance due the next month (aka no auto deduct) so I will keep an eye out for that. I will think of this payment as my test run to see what I am missing. Student loans, the one type of creditor you have to fight to pay off...

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