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Student Loan PLEASE go away.

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    Student Loan PLEASE go away.

    Hello. I have a student loan I would LOOOOOVE to get rid of. If I continue just paying $100 a month it will take 13 years to pay off and I will have paid almost $7000 in interest... I would love to avoid this. It has a variable interest rate( now at 9.49%). Basically I'm asking how do I pay off the principal? Do I just put on the money order $x to principal?

    #2
    It depends on how the payments are made. If you just add extra to your payment they may not put it toward principal. I would contact the lender and find out exactly how to make extra principal payments. You may need to write a separate check and include a letter directing the payment to principal. And when you make those payments, make sure to check your statement carefully to be sure they apply it properly.
    Steve

    * Despite the high cost of living, it remains very popular.
    * Why should I pay for my daughter's education when she already knows everything?
    * There are no shortcuts to anywhere worth going.

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      #3
      it all depends how much you can pay ..and what 's your earning..it takes almost decades to payoff your student debt and you are not an exceptional..just try to generate more income ..

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        #4
        Pay more than $100.

        Try for $500-1000/month. More if possible.


        The only way to get rid of debt is to pay tons of money towards it.


        With the numbers you gave, (9.49%, 13 years to go, $100/month) I'm calculating a balance owed of $8,944.

        At $250/month, it's gone in 42.2 months. (3.5 years)
        At $500/month, it's gone in 19.4 months. (1.6 years)
        At $1000/month, it's gone in 9.3 months. ( <1 year)


        With my student loan company, if you pay more than your minimum, the rest automatically goes to principal. No special action needed.

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          #5
          Originally posted by thsee View Post
          Hello. I have a student loan I would LOOOOOVE to get rid of. If I continue just paying $100 a month it will take 13 years to pay off and I will have paid almost $7000 in interest... I would love to avoid this. It has a variable interest rate( now at 9.49%). Basically I'm asking how do I pay off the principal? Do I just put on the money order $x to principal?
          Basically, pay your normal payment (which they will allocate automatically between interest & principal) and at the bottom of your check or MO calculate any extra dollars and write $x to be applied toward principal only.

          The next payment, just repeat the process.

          The more dollars you pay extra, the less the interest allocation will be on the next payment.

          For DH, SallieMae always allocated properly.

          You cannot entirely erase interest as long as the loan exists and has a dollar balance. But the more dollars paid toward principal, has the immediate effect of lowering next months allocation toward interest.

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            #6
            Also don't worry about overpaying. If on the last payment, you pay too much toward principal, they do indeed send you a check back with the balance overpaid.

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              #7
              I would contact the lender and ask - different lenders may have different procedures. It has been long enough since I paid off my student loan that I don't remember exactly how it worked, but I always sent in extra every month toward principal. For our mortgage when we were paying monthly by check, there were lines on the payment stub specifically for extra principal, extra escrow, and prepayments. For those, you just put the extra principal amount on the appropriate line of the payment stub. Now our mortgage is automated and I have to fax in a written document if I want them to change the amount they withdraw for principal and interest each month. So again, depends on the lender. Call and find out. As others have pointed out, the more you put toward principal, the lower the interest charges and the faster you will pay it off.

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                #8
                thank you so much guys! jpg7n16 that's EXACTLY what I was looking for.

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                  #9
                  There is only one way to pay off the debt faster and that is to throw more $$$ at the problem. Have you considered whether you have anything to sell that can help you expedite the payoff? Perhaps you can find some collectables or items of value around the house that you can sell online or in a garage sale. Also, picking up odd jobs or even a part time job can help you earn a little extra cash. Luckily my student loans are at 1.8% fixed, so I'm delaying paying them off as long as possible. Best of luck to you!

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                    #10
                    Originally posted by buildmybudget View Post
                    There is only one way to pay off the debt faster and that is to throw more $$$ at the problem. Have you considered whether you have anything to sell that can help you expedite the payoff? Perhaps you can find some collectables or items of value around the house that you can sell online or in a garage sale. Also, picking up odd jobs or even a part time job can help you earn a little extra cash. Luckily my student loans are at 1.8% fixed, so I'm delaying paying them off as long as possible. Best of luck to you!
                    She has a storage shed full of stuff and a new tempurpedic bed she is still paying on, but she WANTS that stuff. So she's keeping it. And she has no job.

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