Hey guys, it’s time for another student loan update!
For this update, I’m gonna do the usual of making an extra payment to my Sallie Mae student loan. But also, I’m going to lay out a strategy that I’m thinking of doing for this loan.
If it works well, I might use this strategy for my other loans as well.
TLDR; As always, here’s a video version for your convenience!
Before I made my extra payment, my amount due had already changed from $54.86 to $50. This goes to show how powerful of a change making extra payments to your student loans is.
As I recall, I’ve only had an amount due of $54.86 for only 3 months. To me, that’s another metric hat I observe in this journey. If my monthly minimum is declining, I’m doing some good progress.
Before making a payment, my Sallie Mae #4245 had a balance of $2,100+ plus interest. After making my payments, totaling $400, the balance has been reduced to around $1,700.
I’m finally in the $1,000 mark!
If everything stays like this, I’d be able to fully pay this loan in 5 months.
As for #6489, it’s now around $6,200+. My College Avenue around $3,300. And my Federal loans still hovering less than $12,000.
My New Payment Strategy
I was looking at my GradJoy app to see how my student loans were looking. Luckily, the app gives you smart recommendations to help you pay off your loans sooner.
They recommended that I make at least $10 extra in my weekly payments to my Federal loans. Doing so will help me save around $1,000 in interest and pay the loan at least 19 months sooner.
So that got me thinking…
I’ve read articles about how you can make biweekly payments to pay loans sooner. But there were only a few articles about making weekly payments on your student loans.
The selling point for me here is that as you’re increasing your payment frequency, you end up making more payments without you knowing. Here’s a mathematical explanation:
If I’m paying $400 every month, that means I’ll pay $4,800 in 12 months. But if I make weekly payments of $100 for 52 weeks instead, I’ll end up paying $5,200 in a year. That’s an extra $400 that came out of nowhere! That 13th month is going to help me save without knowing.
The beauty of this, IMO, is that doing the payments more frequently will give me this psychological comfort that “I’m REALLY doing something to tackle this loan!“
It doesn’t feel as slow as making only monthly payments.
It also makes mathematical sense because it helps lower down interest. One thing that you should know is that interest accrues daily for student loans. As I make weekly payments, the interest that accrues daily also reduces, helping me save more.
So I want to test this strategy out. As always, I’ll be documenting them here on my blog and on my YouTube channel. I won’t be doing weekly updates for this though. I think that’s too excessive. Instead, I’ll just aggregate the updates in a monthly update like usual.