Tell All Tuesday - Down With Student Loans
This past weekend, I started Phase 2 of my Sallie Mae Accelerated Repayment Plan (SMARP) by making the first significant overpayment to my spouse’s student loan. I’ll be on Phase 2 for a while because Phase 3 is looking at the payoff amount and paying it all off, which won’t come for a little while yet. Because that’s my only truly exciting news, let’s just get right to the numbers:
- Debt at start of blog (6/19/07) : $36,451.71
- Current total as of 03/10/08: $25,066.25
- Principal paid to date $11,168.48
- Broken down into:
- Student loan: $11,550.22 (made $144.50 minimum payment)
- Spouse student loan: $10,596.32 (made payment of $1015.31)
- Car loan: $2919.71
- % Debt paid off according to NCN Network Chart: 31.24% (last week 28.42%)
In addition to making the minimum payment to my student loan this week, I paid $1015.31 to my spouse’s student loan, which included his $237.59 minimum payment, the $200 in our debt snowball carried over from the credit card, and $577.72 in other snowflaking money. I only had about $300 in other snowflaking money before the weekend but I received some additional blog revenue and money from taking surveys which increased that amount to the $577.72 I was able to pay. From this point forward, I am going to use $437.59 as the “budgeted minimum” amount for repayment of the student loan so I don’t confuse myself. That’s how the debt snowball works, once one payment is eliminated it gets rolled into the next one, so the minimum payment I will make in any given month before snowflakes is $437.59.
The good news is that making this large of a payment did indeed trigger a screen that asked me if I wanted to advance my due date or apply the extra money directly to principal. It even had apply to principal as the default selection, so maybe Sallie Mae is improving on letting people prepay their loans. I was pleased, and yes, selected apply to principal. I may have been concerned for nothing because the selections explained that if I selected “advance my due date” the money would be applied to accrued interest and then to principal, so in effect it may have done a similar thing. I was wondering where Sallie Mae would hold my money instead of applying to principal, after all. We’ll see. I checked after the payment posted to the account and the overpayment portion was indeed applied to the principal balance.
I’m so excited! And I am very optimistic that in April we will get the principal balance on that student loan down to four figures, if not before. The percentage of debt paid off has now jumped into the 30% range and that feels significant too. It is very very close to 33.33%, or one third paid off. It seems like we were just at one fourth paid off a week or two ago. Be sure to click over and look at the chart, it is so pretty. I am biased though. I love the yellow growing and growing. 
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March 11th, 2008 at 9:28 pm
Reading this and your post about subway, I have a thought.
When you reach ‘landmarks’ in dept repayment, Go out and spend 20 dollars on food that you didn’t cook.
Knowing that you get a slight reward when you reach a milestone, makes it easier to be lean in the budget until you get there.
As long as it isn’t every month, because then it becomes part of the budget, and is that much harder to give up.
You could promise yourself that once the spouse student loan is paid, you will add to the budget a category for “food not cooked by me” and that might be a great incentive.
March 11th, 2008 at 10:32 pm
Excellent! Over 4x minimum payment.
March 12th, 2008 at 12:15 pm
Wow! A payment of over $1000. That’s awesome