After around 6 months of saving last week I made two avalanche payments towards my student loans. Both of these were under a different loan provider and the monthly payments were around $200 per month. Although these were not the highest interest rate loans I wanted to knock them off for two different reasons. The first being the $200 was eating into my free cash flow which I needed to lower in order to start my business. The second being it was another loan provider and managing the two was becoming a hassle.
Although in terms of saving on interest I should of made the payment towards the largest interest rate loan but this decision had other strategic reasons. Now with this loan paid off I only have my federal loans left with a balance around 56k left and my minimum monthly payment is $344. By making the avalanche payment on the two loans it brought my minimum monthly payment down from $545 with a majority of it going to interest to $344.
See the word “Loan Closed” brought a smile to my face:
It will also be good to know that the 2018 interest paid will around half the amount as last years paid so that was money well saved.
So now with an update on the final balance left to pay off:
$17,077.01 @ 6.210%
$21,739.62 @ 5.410%
$5,387.56 @ 3.4%
$5,536.40 @ 4.5%
$3,436.54 @ 5.6%
$2,813.40 @ 6.0%
With just 55k left I am more than over the halfway mark from my original student loan debt balance of over 118k. My plan towards paying off the rest is as follows. I will save as much as I can over the next couple of months a make an avalanche payment towards the 17k amount and then for the smaller ones I will start to use the snowball payments method.
Would love to hear about your experience and methods to paying off your student loans in the comment section below.