Hi all.
My wife and I have got a ton of student loans and have started aggressively paying them off in the last year. I'm "down" to $128,000+ now. I am hoping you folks can help me figure out how best to apply my extra payments. Please bear with me, math is not my first, second or third language.
I've got 17 loans in total. I'm posting those below. My total minimum payments are $1,590. I've calculated that to pay off each specific loan in six years I need to pay $2,280 per month (although two of the loans will be paid off in 2 and 3 years, respectively, and then that number will go down for the final 3/4 years.)
So the question is: Where do I put that extra $690 (call it $700) a month to pay the least interest and finish the quickest?
Obviously the answer would normally be to start with the highest interest rate (8.25%) which happens to be on the biggest loan ($19,000.) BUT here's the rub: The bottom eight loans in the first grouping automatically pay almost strictly ONLY the interest each month. They are set up to be paid off in the year 2041. So if I paid the $19,000 first, those loans would have literally no movement by the time I'm done with that one, whereas if I paid those long-term ones off, the minimum payment on the $19,000 (which is $300) would at least be chipping away at while I pay those off.
Am I overthinking that? Do the long-term numbers still bear out to focus on the $19K at first even though I'd be pretty much burning money every month on this large group of long-term loans? OR should I just apply the extra $700/month to each of my loans in such a fashion as I know each one would finish up in the six years I'm aiming for?
Please ask away if I can make this more clear.
And no, refinancing isn't an option for me. I finished shy of graduation when I was younger to take a full-time job. Yes, the system is very broken.
My wife and I have got a ton of student loans and have started aggressively paying them off in the last year. I'm "down" to $128,000+ now. I am hoping you folks can help me figure out how best to apply my extra payments. Please bear with me, math is not my first, second or third language.
I've got 17 loans in total. I'm posting those below. My total minimum payments are $1,590. I've calculated that to pay off each specific loan in six years I need to pay $2,280 per month (although two of the loans will be paid off in 2 and 3 years, respectively, and then that number will go down for the final 3/4 years.)
So the question is: Where do I put that extra $690 (call it $700) a month to pay the least interest and finish the quickest?
Obviously the answer would normally be to start with the highest interest rate (8.25%) which happens to be on the biggest loan ($19,000.) BUT here's the rub: The bottom eight loans in the first grouping automatically pay almost strictly ONLY the interest each month. They are set up to be paid off in the year 2041. So if I paid the $19,000 first, those loans would have literally no movement by the time I'm done with that one, whereas if I paid those long-term ones off, the minimum payment on the $19,000 (which is $300) would at least be chipping away at while I pay those off.
Am I overthinking that? Do the long-term numbers still bear out to focus on the $19K at first even though I'd be pretty much burning money every month on this large group of long-term loans? OR should I just apply the extra $700/month to each of my loans in such a fashion as I know each one would finish up in the six years I'm aiming for?
Please ask away if I can make this more clear.
And no, refinancing isn't an option for me. I finished shy of graduation when I was younger to take a full-time job. Yes, the system is very broken.
$3,262.00 | 6.30% |
$5,916.00 | 6.30% |
$2,404.00 | 5.75% |
$6,171.00 | 6.55% |
$4,796.00 | 6.55% |
$9,084.00 | 6.55% |
$4,423.00 | 3.61% |
$6,329.00 | 3.61% |
$5,335.00 | 4.41% |
$7,293.00 | 4.41% |
$859.00 | 4.04% |
FIRST GROUPING ^^^ | |
$19,883.00 | 8.25 % |
$10,433.00 | 8.25 % |
$10,350.00 | 8.25 % |
SECOND GROUPING ^^^ | |
11,845 | 6.75% |
THIRD GROUPING ^^^ | |
$3,845 | 10.5 % |
FOURTH GROUPING ^^^ | |
$16,653 | 5.50% |