Tired of these loan payments.

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OH HSKR FAN

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I took out this loan back in 2005. As of today the principal is $4,333 of the original 7,495 dollar loan.. At the rate that I have been paying on it its going to take until 2021. The minimum payment each month is about 60 bucks. I have enough in savings right now to pay it off completely but my savings is my rainy day fund for emergencies.

My question would be if you had the cash to pay it off would you? Or should I just gut it out for next 7 years? The interest rate is in the 4-5%

 
Pay as much as you can every month. That's a pretty low interest rate so don't kill yourself over it, but if you can throw an extra 100 or 200 bucks a month at it, you'll be there in no time. You don't have to *just* make minimum payments - if you can afford $500/month that you would have otherwise just put into savings or blown on whatever junk that you won't need, you can have that thing paid off in a year. That's basically what I'm doing with my student loans - I'm on a 10 year repayment plan but I'll likely have them paid off in 3 or 3.5 years.

If you have other debt that is high-interest like credit card debt, don't worry about this loan - pay that off first.

 
Unfortunately, I don't make a lot of money. I would like to get more aggressive with this because it has been bout a decade of payments. On the bright side my current credit card balance is low.

Perhaps getting a part time job and using those paychecks to pay off all debt (loan and credit card) would take about a year.

 
What's your interest rate? If it's low--say below 6%--no need to pay it off right away. If it's much above that I'd probably either pay it off or increase my monthly payments.

 
Pay it off now. The money you save can be put right back in to your savings account. Otherwise, double, or triple your payments.

 
anyone have any experience with student loan consolidation? i have been wondering about it for awhile and am starting to think i am paying and will pay much more than i need to.

anyone consolidate student loans recently and have any advice?

 
Two rules I have lived by, in order.

1. If you can pay it, pay it.

2. Don't chase boom dollars with resession dollars.

Everything else, play by ear.

 
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Pay me now, or pay me later. I never used a loan at all except my mortgage. Absolutely no credit cards, only debit card (checking account). My age is 60 years old.

You know U.S. outstanding debit is 17.5 trillion dollars? The estimated population of the United States is 318,247,026
so each citizen's share of this debt is $54,924.37 .... every man, woman and children
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. Climbing $2.5B every day!

http://www.brillig.com/debt_clock/

Pay me now, or pay me later ............

 
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4-5% isn't very high. You say your credit card balance is low, but sounds like it is non-zero. CC interest is usually double digit %. I would absolutely pay that off first and keep it paid off every month. I'm not a big fan of emergency funds while carrying a high % CC balance because if you have to, you can use your CC in an emergency, but while you have that balance it grows like a week. But I know that a lot of people consider an emergency fund a must-have. Just don't consider a paid off CC as a license to spend.

It is easy to look at that larger debt looming for years and want to get rid of it, but it's not that big of a deal at that rate. Think logically, not emotionally.

 
I have an emergency fund and have a certain number I like to keep it at. Having said that I have student loans, I'll be paying on them for a LONG time at this point. I have no credit card debt, but I do have the following:

Home

2 vehicles, (ones a lease)

student loans

sleep number bed

That doesn't sound like much, but it certainly adds up! Now I say I have an emergency fund, but my wife is the saver, I'm a spender, but she'd rather pay on something for 6 years than pay for it all at once and be done with it, I've never agreed with that. The good news is our boys will be going to Kindergarten next year and daycare will be cut at least by half if not more since we'll only need after school care. We're already living without that money on a tight basis, but we make it work. We're not going to even let that money come back into our budget if we can help it. We're going to use that money and put all that money towards some of these loans to pay them off as fast as possible. So if I was you and didn't have any other debt that was a higher interest rate than this loan, I'd pay it off and be done with it.

 
If you have CC debt, pay that off and never get it again. it is the absolute worst type of debt you could possibly have. Use your rainy day fund if needed to get rid of it.

If you aren't comfortable taking the money out of your rainy day fund to pay off this other loan, then increase the principle payments each month. Even if you have to take money out of your RD fund, that's fine. You aren't going to be draining it all at once but you will be paying the loan off early.

If you pay $60 for 7 years, you will be paying $5,040 to pay off $4,333.

If you take $4,333 out of savings to pay off the loan and then take that $60 every month and put it back into savings, you will have it paid back in 6 years. If you don't have a CC debt payment, you could actually have your RD fund built back up that much faster.

Worst case scenario is that you drain your RD fund, you have an emergency like needing to buy a new car and you have to take another loan out for that.

My feelings is that if you are limited on income, the debt is actually more of a risk than draining your RD fund.

 
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FWIW, the interest on the loan is 4.75%. I have been paying 75 bucks a month on that. A calculator that I used last night determined it will take 5.5 instead of 7 years. If I were to up the payment to 100 I could have it paid off in 4 years.

My credit card balance is low (Under 300 bucks). However with a trip looming in July to Myrtle Beach the concern is that the balance will increase.

 
While I agree that it sucks to have to pay on a loan. I would say that it's good to have cash in a rainy-day fund that you have available. You never know when you might have a large expense pop up, and if you have used your cash to pay off a loan, you will end up using a credit card to pay for this miscellaneous expense.

The interest on your loan is pretty minimal. Yes, you aren't earning that much interest on your money in savings, but that's not a bad price to pay for peace of mind. My recommendation is to keep the money you currently have in savings and not touch it. If you are looking to pay off your loan sooner, then increase your monthly payments.

 
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