If you’re new to Money Manifesto, in December 2012 we decided it was time to open up to you, my readers, and shared our very first debt update.
Student Loan Debt Update – May 2013
Another month has flown by and here we are updating you again on our student loan payoff! It isn’t awesome as it could be, but life happens. Tori, my fiancee, is getting paid through her short term disability insurance again. On top of that, our ex future tenant backed out of renting our townhouse. That means we’ll have to spend more to fix it up than originally intended.
Due to all of that fun stuff happening, we haven’t been making any huge payments on the student loans. Hopefully we can get back on track in another month or two!
Once we’re back on track, we’re considering getting one of the best 0% balance transfer credit cards to try to save some money on interest. I think we’d be able to save at least a few hundred dollars that way. It is a tricky move, but we would make sure we don’t transfer more than we can handle.
Private Student Loan 1 – 8.0% Variable
The current balance on this student loan is $4,682.32. This is a decrease of $144.98 since the last debt update. We are paying this loan off first because it has the highest interest rate and is also a variable rate. It originally was well over $20,000 when my fiancee began paying this down after college in 2011.
Federal Student Loan 1 – 6.55% Fixed
The current balance on this student loan is $7,723.11. This is a decrease of $58.11 since the last debt update. This will likely be the 4th student loan we pay off.
Federal Student Loan 2 – 6.55% Fixed
The current balance on this student loan is $7,197.02. This is a decrease of $60.28 since the last debt update. This will probably be the 3rd student loan we pay off.
Federal Student Loan 3 – 6.8% Fixed
The current balance on this student loan is $3,928.00. This is a decrease of $28.55 since the last debt update. This will be the second student loan we pay off because it has the second highest interest rate AND the lowest balance. On top of that, we hate the bank this loan is through so it gives us even more reason to pay it off.
Private Student Loan 2 – 5.75% Variable
The current balance on this student loan is $22,473.43… ouch! This is a decrease of $98.86 since the last debt update. This is the highest balance loan but it has a lower interest rate for now. Unless interest rates start rising we’ll wait to pay this loan off until the federal loans are paid off.
Private Student Loan 3 – 4.75% Variable
The current balance on this student loan is $8,237.26. This is a decrease of $26.70 since the last debt update. This is the lowest interest rate loan and, unless interest rates rise, this will likely be the last loan to be paid off.
Total Balance – $54,177.26 (-$423.25)
As I had mentioned in the past, I had saved a large chunk of money help my fiancee pay her student loans when we combine our finances after we get married! Then plans changed and we decided to use it for a down payment on a house.
We had hoped to have the student loans all paid of by the end of this year but with the changes of plans this has changed to the end of 2016. Hopefully we can beat this goal, but for now 2016 seems most realistic.
Do you have any debt you’re trying to pay off? Do you have a goal for when you want it paid off by?
Lance Cothern, CPA holds a CPA license in Indiana. He’s a personal finance, debt and credit expert that writes professionally for top-tier publications including U.S. News & World Report, Forbes, Investopedia, Credit Karma, Business Insider and more.
Additionally, his expertise has been featured on Yahoo, MSN, USA Today, Reader’s Digest, The Huffington Post, Fast Company, Kiplinger, Reuters, CNBC and more.
Lance is the founder of Money Manifesto. He started writing about money and helping people solve their financial problems in 2012. You can read more about him and find links to his other work and media mentions here.