Advice on aggressive student loan repayment plan

[ExcelJunkie]

hopeangel - would you mind sharing what kind of match both you and your husbands employers offer, if any? I'm looking for something like:

Me: match first 5%
Husband: no match.

My wife and I are in a similar situation. We have a good deal of high interest debt. What we do and what I'd recommend you consider is to invest in your employers retirement plan to the point you take advantage of any matching, then put the remainder of the extra toward loans. This may delay payoff for a year, but you will not be leaving 'free' money on the table.

[jpg7n16]

... but I have gotten some pretty good estimates by grouping all loans with the same rates and calculating each of those on its own and then adding them together.

Let's see if 3rd time's a charm -- what are the interest rates?

[hopeangel292713]

Let's see if 3rd time's a charm -- what are the interest rates?

3.4%, 6.8% and 8.1%.

[jpg7n16]

3.4%, 6.8% and 8.1%.

In that event, I would do the following.

Keep in mind that when you pay extra, always pay extra towards your highest rate debt.

While you have the 8.1% & 6.8% debt, I would take empl match and also make max Roth IRA contributions for both you and your spouse, only paying extra once that's done. This ensures that you are not missing out on critical IRA contributions that you will not be able to make up down the line. As you are making significantly more than you are spending, the debts will be gone in no time, and you'll wish you had an IRA to put enough money into. Over 3 years, that's approx $33k into tax free retirement accounts.

When you're down to just the 3.4%, I would only pay the min and build up investment assets elsewhere, through 401ks, IRAs, and brokerage accounts. Likely maxing your Roth IRAs and maxing 401ks as well.

[hopeangel292713]

In that event, I would do the following.

Keep in mind that when you pay extra, always pay extra towards your highest rate debt.

While you have the 8.1% & 6.8% debt, I would take empl match and also make max Roth IRA contributions for both you and your spouse, only paying extra once that's done. This ensures that you are not missing out on critical IRA contributions that you will not be able to make up down the line. As you are making significantly more than you are spending, the debts will be gone in no time, and you'll wish you had an IRA to put enough money into. Over 3 years, that's approx $33k into tax free retirement accounts.

When you're down to just the 3.4%, I would only pay the min and build up investment assets elsewhere, through 401ks, IRAs, and brokerage accounts. Likely maxing your Roth IRAs and maxing 401ks as well.

Thanks. This is very helpful information. I don't know if you can answer this - but would consolidating my loans take away my ability to direct the extra payments towards the higher interest loans? With our plan is it better NOT to consolidate?

[jpg7n16]

Thanks. This is very helpful information. I don't know if you can answer this - but would consolidating my loans take away my ability to direct the extra payments towards the higher interest loans?

Yes it would. You would replace your many loans, with a single new loan.

With our plan is it better NOT to consolidate?

Many of the SL consolidation offers I've heard about have not been beneficial enough to warrant it. Most have been in the 5-7% range that I've heard. And there may be fees to do so.

All things together, with your income, it's likely not worth the hassle.

Unless you can consolidate below 4% or something, but I doubt it.