Author Topic: Paid Off Last of the Student Loans  (Read 4251 times)

acepedro45

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Paid Off Last of the Student Loans
« on: July 14, 2015, 09:21:17 PM »
A dozen years out of undergrad, my student loans had steadily dwindled from $20k+ to a measly $4,748.38 as of tonight. I am quite Mustachian and I've had the means to pay them off at a stroke for many years now. But I had always rationalized keeping the loans around because of their extremely low interest rate - under 2.5%. 

Reading MMM's latest post on cognitive bias, though, finally changed my thinking. I tried to do as the post suggested and imagine what I would say if someone came along offering to loan me $5,000 at a rock bottom interest rate. "Just think," that person might say. "You'll be able to invest this $5,000 in the stock market and earn a much better rate of return than the interest costs you."

MMM's post helped crystalize what I had dimly suspected in the back of my mind for some time: I was rationalizing a silly choice and there was no reason to pay the bank interest any longer.


MrsPfennig

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Re: Paid Off Last of the Student Loans
« Reply #1 on: July 15, 2015, 12:28:12 AM »
Congratulations! It must feel awesome. I envy you and I cant wait to be there.

Hall11235

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Re: Paid Off Last of the Student Loans
« Reply #2 on: July 15, 2015, 06:48:03 AM »
Congrats! That must feel so good!
I graduated 2 months ago with 30k in debt and plan to pay it off by December 2016.

Rosy

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Re: Paid Off Last of the Student Loans
« Reply #3 on: July 15, 2015, 07:06:07 AM »
Yay for you:)
 Cognitive bias, I will re-examine my own decisions one more time. It isn't so easy to make smart choices, we all have our blind spots.

@hall That is impressive - good luck in meeting your deadline for paying it all off!

Hall11235

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Re: Paid Off Last of the Student Loans
« Reply #4 on: July 15, 2015, 07:18:35 AM »
Rosy:
Thanks! I am living pretty bare bones right now.
I was able to pay off about 2500 of it while I was in school. Misinformation on my part prevented me from paying more, and now I am sinking around 1500 a month into it. It's definitely the priority. I am one of those folks that is personally offended by debt regardless of the interest rate. I know the math doesn't necessarily back that up, but I really don't like debt! lol.

GoldenNeko

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Re: Paid Off Last of the Student Loans
« Reply #5 on: July 16, 2015, 02:00:11 AM »
Congrats OP! Must feel great!
I personally have payment planned till December of this year. Can't wait to pay myself each month instead of my loan. Soon...

acepedro45

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Re: Paid Off Last of the Student Loans
« Reply #6 on: July 16, 2015, 08:53:31 AM »
Quote
I personally have payment planned till December of this year. Can't wait to pay myself each month instead of my loan. Soon...


Aren't you all worried about your credit score going down if you pay off early? Joking.

Congrats to all. I am keeping the $155.47 monthly student loan allocation active in my budget so I can remind myself not to squander that money.

Mrs. Crackin' the Whip

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Re: Paid Off Last of the Student Loans
« Reply #7 on: July 16, 2015, 10:37:12 AM »
Good for you!  I completely agree with your logic even though we are doing the exact opposite right now.  This year we have paid off 75% of our student loans with all the higher interest rate loans gone.  We are down to 14K in student loans with a 2+% interest rate.  We are letting them be for now so we can get started on our taxable investment accounts.   

James

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Re: Paid Off Last of the Student Loans
« Reply #8 on: July 16, 2015, 10:39:15 AM »
Congrats! Great to hear!

forummm

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Re: Paid Off Last of the Student Loans
« Reply #9 on: July 16, 2015, 10:39:58 AM »
Nice! I'll get there one day myself. I haven't been paying extra because my rate is low and I invest the money instead. But it will eventually feel good to have it gone just the same.

freeedom

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Re: Paid Off Last of the Student Loans
« Reply #10 on: July 17, 2015, 01:08:23 PM »
Just did this as well. Congrats.

Time for us to turn the investing way up!

lackofstache

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Re: Paid Off Last of the Student Loans
« Reply #11 on: July 17, 2015, 01:31:54 PM »
Just paid off my wife's $17k late last month, leaving my $2.5k loans that are at 3.5%; I've been thinking I'll keep them around awhile, but now you've got me scheming...

norcalmike

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Re: Paid Off Last of the Student Loans
« Reply #12 on: July 20, 2015, 08:18:34 AM »
After a few years of just minimum payments, I finally made a step towards paying extra! I threw them a spare $600 this month.
Next month and every month after will be $1000 extra.
I should have them done in 18 months.
Sure beats dragging it out 8 more years!
Inspired by MMM

EAL

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Re: Paid Off Last of the Student Loans
« Reply #13 on: July 20, 2015, 09:34:49 AM »
Yay Yay Yay! Great job!

Bob W

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Re: Paid Off Last of the Student Loans
« Reply #14 on: July 20, 2015, 11:55:55 AM »
Good bye Sally Mae!

Helvegen

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Re: Paid Off Last of the Student Loans
« Reply #15 on: July 20, 2015, 04:59:26 PM »
I also argued with myself over paying off my student loans or making payments for the next 3-4 years because of my low interest rate. But I pulled the trigger last month and paid them off. My starting balance was nearly $22k 11 years ago, managed to pay it down to a measly $18k this time last year. Then I got a good job and was able to kill the rest in just under a year. Being debt free feels good man. Congrats! :D