So I've been thinking about how to start attacking the student loan debt monster and I think I've come up with a plan that I can follow. My plan is to first pay off the private loans because even though they have lower interest rates than my federal loans, the private lenders don't have flexible options like Income Based Repayment or loan forgiveness for public interest work.
GOAL: Pay off all private loans by December 2015!
Here is my plan to reach this goal:
- First, pay off two smallest private loans (~$4261) by February 28th → reduces monthly payments by $100
- Second, pay off Private Loan 1 (~$11,523) by March 31st → reduces monthly payments by $161 (monthly payments reduced by $261 total)
- Then, pay off the various loans that fall under Private Loan 3 from highest interest rates to lowest (total ~$44,745) → reduces monthly payments by $305 (monthly payments reduced by $566 total)
- Next, I will pay off Private Loan 2 (~$10,139 - this has the lowest interest rate @ 3.03% interest) → reduces monthly payments by $81 (monthly payments reduced by $647 total)
- While I'm working on paying off my private loans, I will continue paying the monthly minimum on my federal loans until I have paid off all of the private loans. Once the private loans are paid off, I will reassess my strategy for paying off my federal loans.
By December 2015, I will have paid off the approximately $66,407 that is currently owing on my private student loans. I CAN'T WAIT FOR THAT DAY TO ARRIVE!!!!!!!!
The process of writing out steps to pay off the $66k in private loans makes it all seem that much more doable rather than thinking of the total amount I need to pay off, which is quite a hefty sum. This list will help me focus on the process and just take it one step at a time.
Check the blog often for updates. I will be tracking my progress here as I continue this adventure! :D
Wish me luck!