On this debt repayment journey I became extremely frustrated by my insufficient traction of reducing debt despite my effort to pay extra monthly. This post will demonstrate the breakdown of where I am now, and how my balance was reduced based off my payments.
My loan is presently being serviced through Navient, formerly known as Sallie Mae. I originally started out with two different loans. The first is from achieving my BS in Education, and this loan is unsubsidized. My second is from achieving my MBA, and this loan is unsubsidized. After completing all my studies I consolidated the two loans, and I am currently on an income based repayment plan. My starting balance on January 1, 2017 was $82,047.33. My minimum monthly payment is $971.00, and I have a 6.75% interest rate.
I applied two payments this month due to a bonus, and my normal monthly payment. My first payment was applied on January 11 in the amount of $1000. I paid extra on my student loan payments in November of 2016 and therefore advanced my due date to January 27th, 2017. This was not my intended plan, but after an unexpected emergency it ended up working out an I did not pay a December payment. Even so, that meant I had not paid on the loan since November 30, 2016. Consequently, there were forty-two days in between my current payment and my last payment. This resulted in me having to pay $666.79 in interest that accrued over that time period. Resulting in only $333.21 being applied to my loan, even though I was still technically on time. Daily I approximately pay $15.87 in interest.
My second payment was applied on January 28th in the amount of $890. There was only a 17 day difference from my last payment hence more money went towards my principal and less towards the daily interest. This resulted in $663.60 being applied to my balance. My total remaining balance as of January 28th is $81,050.52.
Each day I don’t pay costs me an extra $15.87 out of my pocket.
Know your due date but still pay early if you can
The more you pay towards your loan the quicker you will be out of debt. If you pay earlier this can save you payments on interest.
Make sure you are not prepaying interest
I have heard stories of people paying extra and it was being applied to future interest. Please know how your payments are being applied, and be detailed when mailing in paper checks. You should not be paying interest that has not accrued yet.
Ignore the advanced due date due to extra payments
The goal of lenders is to keep you in debt as long as possible. Just because their due date in the amortization chart has updated, doesn’t mean you shouldn’t still attack those loans like your life depends on it.
I hope this was as valuable for you as it was for me. This process has helped me understand how my loans shot up to over $90,000 when in reality I had only originally borrowed $70,000. Knowledge is power!!! If you are struggling with your student loan payments reach out to the Student Loan Doctor for support. Sonia (the Student Loan Doctor) has helped hundreds of people get on track to repaying their student loans. Only request is you let her know who sent you (loanfreestudent).
Please comment and let me know what you think about the post. If you have any questions don’t hesitate to email me at firstname.lastname@example.org
Disclaimer: This information is based off of my student loans, and is only intended to showcase my student loan situation. I am not a professional, and your circumstances can vary depending on what types of loans you have and with whom you have them with. It’s up to you to research the differences and use this only as a guide as you start your journey to understanding your student loan repayment. I have a partnership with the Student Loan Doctor where I do receive a referral fee. I look at it as a win-win. You get the support you need, and we all push towards reaching our goal of being a #loanfreestudent ❤️.