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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: RelaxationSpecialist on November 09, 2014, 10:38:14 AM

Title: Student Loan Amortization Table... Looks like I just saved $34k? Am I right?
Post by: RelaxationSpecialist on November 09, 2014, 10:38:14 AM
Hi all! **Warning : I'm not the best at explaining financial math, but I could use some help, so here it goes.**

We have a student loan that had a starting balance of $62K at 8.15% (ouch!!) 30yr in 7-2003. We got really serious about getting rid of all our debt at the end of 2012. By the time November 2013 came around, we had no debts left aside from the mortgage that we re-fied to a 15yr in August 2013 and the student loan, now with a balance of $52.9K. We have been hammering on that beast for a solid year, and the new balance as of November 2014 is $32.9K! Yew!!

So, to my question... I printed out an amortization table starting from 7-2003. First, I highlighted our debt destruction starting balance of $53K (which would have happened on 4-2014 according to the table). Then I counted forward on the table 12 months to take me to where I would have been on 11-2014 with no extra payments. The balance there was $51.6k. Then I found the balance we are actually at on 11-2014 of $32.9K, which is a 2-2025 date. Then I just simply added up all the interest I didn't pay between the two time periods of where I would have been, and where I am, giving me $34,602.54 in interest savings... Is that right???

It seems CRAZY that we just saved that much money!!! I know it was nuts when we did our re-fi how much we saved in interest right off the bat. So, if these numbers sound right to people in the know, please let me know... also, any tips are appreciated too. Can Not wait till this anchor is gone from around our necks.

thanks!!!
Title: Re: Student Loan Amortization Table... Looks like I just saved $34k? Am I right?
Post by: Apples on November 09, 2014, 12:19:20 PM
From what I can tell, yes you're right!  You've saved your future selves $34,000 in interest payments :)  My husband and I have been paying off student loans and at our aggressive rate we're saving about the same amount in interest payments.  Congrats, making good financial choices is awesome!
Title: Re: Student Loan Amortization Table... Looks like I just saved $34k? Am I right?
Post by: YoungInvestor on November 09, 2014, 01:08:25 PM
Well, if you need a $ amount, I'd also bring back these future numbers to today's dollars, but all in all, yeah, pretty much.
Title: Re: Student Loan Amortization Table... Looks like I just saved $34k? Am I right?
Post by: chicagomeg on November 09, 2014, 01:14:31 PM
The only think you're missing is how much interest you did pay in the last year, because it's not 0. Since they're student loans, you should get the interest statement for your taxes in January, so that would be an easy way to know approximately. You'll need to deduct that from the $34k to get your true savings.
Title: Re: Student Loan Amortization Table... Looks like I just saved $34k? Am I right?
Post by: RelaxationSpecialist on November 10, 2014, 07:13:35 AM
Sweet!! Thanks for the replies!! I'll make sure to deduct the interest I did pay this past year and get a more accurate amount. Just so super psyched to see all that savings!! Yewww!