It’s time for another student loan update! Let’s look at the cycle between August and September because I got some big news coming your way!
(Here’s a video for your convenience!)
College Avenue
My Payments
Back in my previous update, College Avenue had a balance of $1,272.97. I was very excited because I had estimated that this loan would be paid off in 10 weeks. However, that wasn’t the case because throughout this cycle, College Avenue has been fully paid off.
Yes, you’ve heard that right! College Avenue is finally paid off and gone from my list of student loans. And the final payment happened on Sunday, September 12.
If you’re wondering how this all happened, here’s how I was able to pay off College Avenue in just 4 weeks instead of 10. Let’s look at my payment breakdown.
On August 22nd, my weekly automatic payment kicked in and I added an extra $220. This $220 came from two things. $200 was from my Chase credit card bonus, and the $20 was from surveys. Luckily, I was able to hit my signup bonus requirement before the points would get credited to my account in Chase.
Just for that week alone, I paid $360 to College Avenue.
Next on August 29th, another weekly payment kicked in and a whopping $500 was added to this payment. If you’ve read my Net Worth Update article, you’ll know where this came from. But if you don’t, this is part of my airline ticket refund. I decided to take $500 of that and inject it in my College Avenue.
I wanted to use the entire ticket refund to fully pay off the loan, but decided against it. I realized that even though numbers-wise it was a better option, being able to add to my savings as well was a more sensible approach.
Since I’ve already committed $140 every week, I know it was going to get paid off in the next weeks no matter what. But my savings were still a big unknown because I’m not aggressively working on it compared to my student loans.
So for that week, I paid $640 to College Avenue.
Then on September 5th, my weekly automatic payment happened again. No extra payments here. It was a boring week.
And here we are on the last week. On the 12th, my automatic weekly payment only charged the balance left. However, it didn’t include the interest that it would accrue. So you see two payments here, where the last one is the interest payment, finally paying off my loan balance in College Avenue!
My Interest Accruals
At this point, it’s kind of pointless to look at the accruals but I might as well, so we see how it declined.
Last update, the interest accruals were in the $1 range. And because of the huge payment that I made, the accruals went immediately below $1, from $1.22 to $0.37 in one week.
And that is it for College Avenue, and the end of my private student loans. Next, I will focus on paying off my federal student loans. And like with my private student loans, I’m going to start with the lowest balance first. Then, work my way up to paying off the highest loan balance.
One week prior to finally paying off College Avenue, I was thinking about changing my strategy and not pay my federal loans after. Instead of paying the federal loans, I would invest the money into my stock or crypto portfolio and just resume payments when the payment pause ends.
But I decided against that, and just focus on seeing this strategy through. That way, I can reduce my loan balance faster and get it out of my head as soon as possible.
EdFinancial
I barely give out details about my federal loans since it hasn’t been the focus for the last 2 years until now. For my Federal loans at EdFinancial, it still sits at $11,343.14. Just like the previous updates, there aren’t any changes here.
My federal loans are split into 4 groups, namely, Group A, B, C and D.
- Group A: $5,344.78 with 4.45%
- Group B: $1,777.45 with 4.45%
- Group C: $3,566.68 with 5.05%
- Group D: $654.23 with 5.05%
So the order in which I would be paying these loans will be D ► B ► C ► A.
Let’s talk about Group D since this will be the focus until it gets paid off.
The last payment I ever made to Group D was back in March 2021 with an amount of $75. But I tried to make consistent $75 payments to this group since July 2020.
Weeks Left to Payoff
With my $654.23 loan balance in Group D, it is estimated that I will pay this off in just 4 weeks if I make payments of $165 every week. This loan will be paid off that fast since it is a very small amount. But still, that gets me excited because that is one more student loan gone from my list. And that gets me closer to my debt free goal.
One thing I actually don’t like about EdFinancial though is that they aren’t flexible with their automatic payment options. I can only do automatic payments on the due date of my entire account, and I can’t target specific groups.
So if I were to set up autopay, they will “align” the due dates of all the groups in my account to one date. Then, the payment is applied to all groups. Their autopay doesn’t allow you to target a specific group unless you make a manual payment.
This means that I will have to manually make the extra payments every week and still setup autopay because that will take care of all groups. But for now, I’m not setting up autopay since all groups don’t need to be paid, thanks to the payment pause.
This week till the end of the payment pause, the payments will be simpler since I’m only doing the manual payments. I won’t have to think about the autopay and calculations involved with it.
Final Thoughts
The balance as of September 15, 2021 for my entire student loan is $11,343.14!
This balance is literally just the federal student loans. No more private student loans. So I’m saying goodbye to my high interest rate loans.
Just going over my current list of student loans gave me this sort of emotional reaction to my journey. It was just two years ago when I started documenting my payoff journey, and here I am now, finally taking on my last four student loans.
I’ve reduced more than half of my $29,000 debt in two years and I’m really excited in being able to pay this off, by my estimates, in March 2023. If everything goes really well, just like how I’ve been doing it in previous student loans, I will be able to pay it off sooner.
One thing I have to bring up though is that during this time, I plan not to add any extra payments to my student loans because I’m working on hitting one of my financial goals this year. And that is getting my emergency savings to $6,000.
I’m still at 75% of that, so any extra money I get from my side hustles will be redirected to that goal. You can expect that the next student loan updates might have less action happening. But I will try my best to add some tips or lessons during those updates. That way, you’re learning all the time from me and my journey.