Hello, everyone. This will be my first post
1 here, so here it goes:
I currently have about
$21,000 left in student loans. I have been paying them off for about a year and a half. I accumulated these loans in my much less mustachian days.
These are all federal (US) government loans. The balances and interest rates are here:
$3,028 | 3.15% |
$3,960 | 3.15% |
$691.94 | 6.55% |
$4,852 | 3.61% |
$1,863 | 3.61% |
$4,760 | 4.41% |
$1,810 | 4.41% |
My currently monthly payment:
$267Since finding this forum, I have gotten a bit smarter about debt, and I believe I can feel the first bit of peach fuzz starting to come in. Over the past year, I have been increasing my monthly payment amount and have now hit about
$467/mo with every intention of increasing this payment more so long as it makes sense. The excess payment is applied to the highest interest loan.
I have recently come to realize that I could instead switch to the graduated repayment plan. The schedule would be as follows:
Number of Payments Monthly Payment
24 $183
24 $217
24 $259
24 $307
6 $365
However, I would continue to pay the same amount ($467/mo) as I do now. In fact, I plan to increase it even more. My understanding is that my minimum payment across
all loans will decrease, and I would have more "excess payment" that would go toward that higher interest loan, thus knocking it out
even faster than I already am. Seems like an easy choice!
This assumes my income remains stable, which I am comfortable that it will.
My question is: Does this idea have any hidden repercussions? Does choosing a different plan have credit score implications, or anything like that? I feel like everybody should be doing this! It seems to be that this could easily shave a couple of months and a couple hundred interest-bucks off my loan repayment schedule. That's easily worth the 5 minutes it would take to change my plan online.
Thanks for indulging in my rather particular story. I hope it applies to others and that they may find use in it.
________________________________________________________________
1Obligatory 'long time lurker, first time poster and happy to be here', 'I did a search on this but couldn't find anything', etc etc.