JR
JR
Nov 22, 2018 · 3 min read

As we approach Christmas 2018 I have the opportunity of answering the question:

What am I thankful for?

This year, i’m thankful that I continue to have the ability to pay down my massive $170,000 student loan debt. On 11/19/18, a payment of $2002 was posted to my loan servicer — EdFinancial which reduced my total payoff balance to $165,549.15


Let’s break it down

My student loans are currently in grace period until Feb 2019 but i’m still making targeted payments using the ‘snowball method’: paying my smallest loans first. In my last post , loan group C and loan group E were paid in full — each with an original balance of $3,352.11 and $4,148.07.

October 2018 Loan groups C & E paid in full!

Note the last column is my ‘payoff rank’, this is how i’ve implemented my student loan debt snowball method. With 1 and 2 PIF (paid in full), group A is next! Here’s how the $2002 November 2018 payment was split:

Group A Paid in Full

First, I executed a manual payment of $1,156.44 to group A. Group A loans originated from wayyyy back in 2005, with interest payments already applied, over 99% of the payment went to principal and like magic, group A is gone!

Holla group A paid in full!

Group B All Interest Payment

If group A paid in full was the good news, group B was the bad news and serves a reminder to potential student loan borrowers the risk of DEBT!

This loan costs me $31 a day!

Group B is a single loan of $18,170 with an outstanding balance of $19,387.99. It has an interest rate of 6.319% which accrues from the day of disbursement. This loans accrues approximately $31.46 of interest per day ((.6319/365) * 18,170).

This is also my first loan payment to group B ..ever! So what happens when you make an $845 payment towards an $18,170 loan that has $1217 of interest accruing at a rate of $31 day?

Answer: the entire payment is applied to interest!

Where did the money go!?

Painful right?

Recap and What’s Next

With 8 payments and 3 student loan groups paid off (see below), the small loans are all closed.

Payment History as of November 2018

March 2020 is still the goal to be 100% student loan debt free. What about you? How’s your debt journey? Are you the master of your destiny? Clap and let me know!

My debt free journey

This story is published in Educated but Broke — a publication dedicated to helping you fight student loan and consumer debt by providing real-life, practical advice.

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Educated and Broke

You are too smart to be this broke.

JR

Written by

JR

Went to college and graduated with a $170k of debt. Insanity pursues @ Educated & Broke

Educated and Broke

You are too smart to be this broke.

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