Student Loan Progress – April 2014

Another month, and another government loan that is fully paid off for me making it two months in a row. I wasn’t expecting this to happen so soon this year, if at all. But my fortunes started to turn around when I was able to refinance my private loans to a lower interest rate last month. I was then able to use my bonus last month to put over $3,000 towards my loans then and after receiving my tax refund this month I’m very happy to report I was able to do the same thing this month!

With my private loan now carrying an interest rate of 6.5%, the focus has temporarily shifted towards my government loans that have an interest of rate of 6.8% as I continue to use the “avalanche” method to pay off my loans – targeting the highest interest loans first. This has the added benefit of being able to lower my monthly minimum payments faster and save the most money on interest possible. I’ll probably shift this strategy a bit once I start moving back towards my private loans as I look to move out, but for now this is a strategy that is fitting both of those goals.

Here is what my student loans look like this month after making my payments:

You can see that in addition to paying off Government Loan 4, I have now also completely paid off government loan 6! I received a tax refund of a little over $1300, most of it thanks to my student loan interest deduction and I ended up putting exactly $1300 extra towards my loans which is what allowed me to do this. For my private loan, it is now due much earlier in the month than my original loan so a little more principal than usual got taken off this month as not as much interest had accrued with the shorter time in between payments.

With paying off these two loans, I was able to eliminate monthly payments of $25 and $26, bringing my minimum monthly payment down to $765 as opposed to $816. Still not looking too great as that’s a large chunk of my paycheck but it’s getting better. And technically my private loan minimum payment has dropped to $300, but I’m still treating it as a minimum payment of $500 because I don’t want it to last longer or have to pay more interest on it.

I was also able to hit a little mini-milestone this month, with my loans finally being less than my salary and dipping below $55,000. Obviously I don’t make that much because of taxes, but it’s still a nice feeling to know that my loans are finally less than my advertised salary! It will feel even better when I’m actually able to wipe my loans out within the calendar year. I’ve also been tracking my progress monthly based on a goal and a stretch goal, so let’s see how I’m measuring up to those:

Main Goal: $20,000 Principal Reduction: $10,476.21 so far = 52.4%
Stretch Goal: $25,000 Principal Reduction $10,476.21 so far = 41.9%

It looks like I may have made my goals a little too easy, as I seem to be blowing by them! I didn’t really factor in a bonus and a tax refund as those things aren’t guaranteed but as of now I’m easily going to hit my main goal, and the stretch goal is looking good as well. We’re only 4 months into the year and I’m over halfway to my goal and over 40% towards the stretch goal with 8 months of payments remaining. Maybe my stretch goal should have just been my main goal at this point but I don’t see any extra large payments coming the rest of this year.

photo credit: VinothChandar via photopin cc


  1. Nice job, and congrats on another loan being paid off! It’s great to think of your minimum payment as a higher amount than it actually is. It’s also nice to hit those little milestones along the way!

    1. Thanks, it’s nice to see another one crossed off the list. And I agree with that, when I refinanced my loan it went from a 10 year loan to a 15 year loan, but I’m treating it is as if it is still the same loan and keeping that minimum payment the same. Keeps me in the mindset to not slack off and only pay the $300.

    1. Thank you 🙂 These have been a great two months for me, and even though there no large cash sums on there way to me again next month (at least not to my knowledge) I’d like to keep this momentum going for 2014.

  2. Wow! You’re doing awesome! Congrats on passing your milestone, that’s a light at the end of the tunnel if I’ve ever seen one 🙂

    1. Thank you very much, I’m hoping that end of the tunnel approaches sooner rather than later! It was a nice little milestone to hit, even if I hadn’t been thinking of it in advance. Just kind of noticed and thought I would share!

  3. Wow! Great progress. Pat, pat, pat, on the back!

    It must feel good when the list of open debts gets shorter and shorter. I have fewer but they’re much bigger. I love following everyone’s debt repayment journey. Food for the soul.

    1. Thanks, and yes it feels great. If only we could completely get rid of those debt lists and things would be even better. I fully agree with you, it’s motivating to see that others are going through the same sort of struggles and triumphs along the way.

  4. Wow! You go, Debt Hater – those are some awesome numbers I see on your spreadsheet! That is some AWESOME momentum you have going for you! Keep it up! 🙂

    1. Thank you very much 🙂 These last two months have really been momentum building like you said, I feel like I’m finally to the top of the mountain and starting to head down the other side at this point – or at least really close.

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