Another student loan update for the May to June cycle. And this one is HUGE!
Sallie Mae
My balance on Sallie Mae in the last update was $775.81. And as of the time of this writing, I’ve reduced that amount to $0. Sort of. That’s a $775.81 reduction. That’s right! I’m officially done with Sallie Mae!
In my previous update, I estimated that I would finish this loan in 6 weeks. I’m glad to say that I finished it in 5. I started paying consistently on Sallie Mae #6489 in September of 2020 and I estimated that it would take me roughly 52 weeks to pay it off.
I worked hard at scrounging up extra money in every place that I could get them. Throughout 2021, I was able to find places where I could get extra and add it to my weekly payments. And because of those efforts, I ended up finishing this loan in only 48 weeks. That’s roughly 3 months early than my initial estimate.
Throughout the final weeks of my repayment to Sallie Mae, interest accruals had gone down to $1 and by June 11th, my auto-debit made a final payoff. Or that’s what I thought…
However, Sallie Mae did not make a full pay off when my auto-debt kicked in. Instead, they simply charged $105.61 and did not include an accrued interest of $0.13. Obviously, this kind of ticked me off because I was thinking that my $125 overpayment would at least take care of everything, including the accrued interest.
I started to think that Sallie Mae’s system wanted to just do that $105 charge, so that it could still milk out some more interest on that remaining $0.13 on my account.
So, I went and talked to them and they told me that they’re going to waive the interest, so I can finally finish my Sallie Mae loans. A Sallie Mae agent also told me that their systems wouldn’t accept payments less than $1. Instead, it will be written off.
I’m glad this matter was sorted out, and this is finally goodbye to Sallie Mae. I don’t think I will ever miss her…
College Avenue
Moving on, it’s time for me to tackle College Avenue.
For this loan, I checked my outstanding balance and is now sitting at a balance of $2,799.30. Since the last update, I’ve made 4 payments of $15 to this loan, totaling to $60. Luckily with College Avenue, I can set automatic weekly repayments unlike Sallie Mae. So, I went ahead and added $125 to my weekly $15 payments.
This is in lined with my hybrid debt snowball-avalanche strategy, where I start paying off my high interest student loans first (private), but start paying the lowest amount first. After all private loans are done, I tackle my federal loans which is at lower interest rates.
College Avenue makes it easier for their customers to view their transaction history, so it was easy for me to see how my interest accruals were declining.
Since the last update, my interest accruals were in the $3.70 to $3.80 range. With the extra $140 per week, I can estimate that the interest will reduce by at least 10 to 20 cents every time I make the payment.
If you look at the calculator below, it is estimated that by paying $140 per week, my $2,799.30 balance with a 6.98% interest rate will be paid off in 21 weeks, or around the middle of November.
I am very excited in challenging this timeline. If I continue the hustle I did with my last Sallie Mae loan, I don’t see why I won’t be able to pay this off sooner than November.
EdFinancial
For my Federal loans at EdFinancial, it still sits at $11,343.14. The payment pause ends in September 30, so a lot of us borrowers may be in for a shock when repayment comes back. But if you’ve been paying attention to what is happening, then this is to be expected.
I’m preparing myself mentally and financially by committing $100 every month to my federal student loans when the forbearance ends, instead of just paying my minimum of $75.26. That amount is low enough not to mess with my budget, but high enough to also pay off some of the principal balance.
I want to set up things as early as I can, so I don’t forget. However, while I was looking to set up my automatic payments in EdFinancial, I could not find a way to make automatic payments more than my minimum and make it weekly. Their KwikPay option only does a monthly repayment on the minimum. You have to manually make the extra payment on their website or through other means.
EdFinancial has both the problems that Sallie Mae and College Avenue separately had – no weekly repayment options and no mobile app. But that’s a problem for the future.
Balance as of June 19, 2021 for my entire student loan is $14,142.44! That is roughly 50% from when I started my debt free journey.