Edited to add– I have 6 months in emergency fund for myself, and the amount I am going to use to pay down my loans is in excess of that–which I've been holding onto in a HYSA for no discernable reason other than being afraid to let go of it (thanks childhood financial trauma)
~$58k in student loans. I have been (stupidly) holding on to an emergency fund that is much larger than I need it to be. I have $25k I want to use to make a dent in my student loans. I am also putting $1000 a month towards my loans at present.
My plan is to pay off the highest interest rate loans first. I am wondering if there is any different approach I should take AND if there is any reason to wait until my SAVE plan is revoked?
The breakdown is below:
| LOAN TYPE | ORIGINIATION DATE | INITIAL DISBURSEMENT | INTEREST RATE | CURRENT BALANCE |
|---|---|---|---|---|
| DIRECT UNSUB | 9/8/2011 | $2,750.00 | 6.80% | $3,824.89 |
| DIRECT UNSUB | 2/1/2012 | $2,750.00 | 6.80% | $3,742.26 |
| DIRECT UNSUB | 9/17/2012; 1/18/2013 | $6,500 | 6.80% | $8,422.87 |
| DIRECT UNSUB | 9/11/2013 | $3,000 | 3.86% | $3,225.12 |
| DIRECT SUB | 9/11/2013 | $2,250 | 3.86% | $2,196.62 |
| DIRECT SUB | 2/2/2014 | $2,250 | 3.86% | $2,196.62 |
| DIRECT UNSUB | 2/2/2014 | $3,000 | 3.86% | $3,179 |
| DIRECT SUB | 9/5/2014 | $2,250.00 | 4.66% | $2,017.48 |
| DIRECT UNSUB | 9/5/2014 | $3,000.00 | 4.66% | $3,053.30 |
| DIRECT SUB | 9/24/2015 | $2,750.00 | 4.29% | $2,384.89 |
| DIRECT UNSUB | 9/24/2015; 1/25/2016 | $7,000.00 | 4.29% | $4,838.05 |
| DIRECT UNSUB | 2/18/2016 | $2,750.00 | 4.29% | $2,537.68 |
| DIRECT SUB | 5/15/2017; 6/21/2017 | $5,500.00 | 3.76% | $5,064.68 |
| DIRECT UNSUB | 5/15/2017, 6/21/2017 | $7,000.00 | 3.76% | $6,730.90 |
| DIRECT SUB | 9/5/2017 | $2,523.00 | 4.45% | $2,397.02 |
| DIRECT UNSUB | 9/5/2017 | $1,750.00 | 4.45% | $1,708.31 |
| ORIGINAL LOAN TOTAL | $57,023.00 | CURRENT TOTAL | $57,519.66 |
On SAVE but want to make a big payment–any reason to wait?
byu/Eggeggedegg inStudentLoans
Posted by Eggeggedegg
5 Comments
Zero reason to wait. Pay that MFer down and keep making avalanche payments with your $1000
I don’t think there’s any reason to wait now that interest is accruing. You can choose which specific loans to make the payments to, so target paying that $25K to all of the ones with the highest interest rates! I just made a very large payment to my balance. Split the amount toward the 3 loans with interest higher than 7%.
If you are talking about dumping your entire savings on these loans, that is generally a poor idea. If you are able, you should retain 3-4 months of living expenses in savings for unforeseen problems in life. In general, repayment of these loans should come second to that, especially since we are likely headed to a recession.
If you already have an emergency reserve fund and you’re talking about extra cash you’ve saved up, then you can ignore my comment.
No shame in holding onto a big emergency fund, shit’s pretty unpredictable these days. But it sounds like you are in a good spot to start dumping some money into these loans. Make sure to keep 3-6 months salary in savings if you do, it’s not worth losing that security.
I had 35k in loans with similar interest rates. When they started accruing interest again in August, I paid 10k towards them (highest interest first). And I’ve been able to pay 9k more since then. Now, when SAVE is officially over, the max my minimum payment would be on the standard repayment plan would be 200/month, so I’m glad I did it.