Another month and another round of loan payments as we move towards the end of 2013 as I slowly “race” towards my goal of zero. My progress has been steady and I hope to continue that progress next month and into the new year. The holiday’s are coming up so I know that I will have a bit of a spending increase, but I plan on keeping my loans as my #1 priority and structuring my spending money around the loan payments. I know if I have to I can always tap into my emergency fund and then lower my spending the next month to compensate if needed.So I did make steady progress this month, I also had a slightly unexpected twist to my loan payments. I’m not sure if my private loan provider switched the order of my payment screen, or if I’ve just been lazy and haven’t paid attention to it but I ended up putting the bulk of my payment towards my smallest loan. When making the payments they just show the amount due and just a loan number like ‘P234824’ so I may have been a little careless when applying the payments. In my own defense, the payment screen has the loans in reverse order as compared to screen I see when I first login.
When I first went to review my loan balances after making the payments I was a little angry, but after a while I started thinking of it as a positive thing. The interest rate on that loan is 7.35% compared to my higher percent loans being 7.92%, so while I lost a few more dollars in interest I don’t think it’s a huge deal. You can see how my payments ended up for this month below:
|Loan||Loan Amount||Change||Interest Rate|
|Private 1||$ 16,031.34||$ (173.47)||7.92%|
|Private 2||$ 19,654.61||$ (75.38)||7.92%|
|Private 3||$ –||$ –||7.92%|
|Private 4||$ 1,907.05||$ (1,513.43)||7.35%|
|Gov 1||$ 3,663.03||$ (31.51)||3.40%|
|Gov 2||$ 3,191.32||$ (25.23)||6.80%|
|Gov 3||$ 5,063.50||$ (38.20)||4.50%|
|Gov 4||$ 1,915.95||$ (18.22)||6.80%|
|Gov 5||$ 5,106.26||$ (35.71)||5.60%|
|Gov 6||$ 2,029.42||$ (18.02)||6.80%|
|Gov 7||$ 4,175.13||$ (32.60)||6.00%|
|Gov 8||$ 3,195.96||$ (25.63)||6.80%|
|Total||$ 65,933.57||$ (1,987.40)|
As you can see from the above, I now have a balance of around $1900 remaining for my 4th private loan. I think an aggressive goal will be get a payoff quote from my provider next month and try to pay this loan off in full next month no matter how much it takes. I think it would be a good wrap up for 2013 and it would also free up more dollars from getting rid of the minimum payment on my second loan now. Then in 2014 I’ll be able to re-focus on eliminating Private Loan 1 as soon as possible with the 2nd private loan following closely behind that.
I’m not sure how possible this goal really is as I put $2,300 total towards my loans this month and that is approaching the maximum amount I am usually able to pay off. With a $1900 balance plus any interest that accrues in the next month it will definitely be cutting close with all the other minimum payments I have to make, but I still think that it’s a good goal to strive for. I’m going to be taking what I thought was a negative and try to turn it into a positive and a psychological victory using somewhat of a “snowball” method for my next payment as opposed to the “avalanche” method I had been using to pay back loans previously.
What do you think about my end of year loan plan? Should I just go back to making Private Loan 1 my focus right away in December and not wait until January?