It’s time for another student loan update! Let’s look at the cycle between September and October because another big news is coming your way!
(Here’s a video for your convenience!)
EdFinancial
After paying off my College Avenue loans, I’ve refocused my attention to paying off Group D in EdFinancial. When I first started, Group D had a balance of $654.23. From September to October, I’ve made three weekly payments of $165. Then recently, I made a final payment of $159.23 to Group D, effectively paying off the loan!
Yay!
This marks the first paid off loan in my federal loan account. Three more remaining and I will be free of my student loan debt.
Since we are still in a payment pause, there are no interest accruals. And I won’t be adding this part in the meantime until the payment pause ends.
Paying Off Group B
The next one I’m tackling in EdFinancial is Group B, which has a balance of $1,777.45. It has an interest rate of 4.45% and the last payment I made to it was back on March of 2020 for $14.56.
A little bit of background for this loan. This is an unsubsidized loan, which I took out in 2017. I chose a Graduated Repayment plan for all of my federal student loans.
What that means is that my initial monthly payments were lower when repayment started in 2019. And every two years, my monthly payments will increase. This repayment program was meant to match the increase in a borrower’s income, and that worked well for me.
But I made a very irresponsible mistake of not paying back when it was time to pay back. This loan had an original balance of $1,697, and since I didn’t make some repayments, interest accrued and capitalized to $132.12.
I made a video explaining capitalized interest back then, so check that out. (link to capitalized interest video)
Anyway, instead of making just $165 weekly payments, I’m planning to make $180 payments. I honestly don’t know how much my monthly minimum for Group B is because payments in EdFinancial is always applied to the entire account.
Back when I made a payment to the entire account, 79% went to the principal balance and 21% to the interest. And a month prior to that, 54% to the principal balance and 46% to the interest.
I couldn’t find a standard formula to follow, so I’m just going with my gut and allocate an extra $15 towards my new payment.
Weeks Left to Payoff
With my $1,777.45 loan balance in Group B, it is estimated that I will pay this off in 10 weeks if I pay $180 every week.
Since I’m currently focused on hitting my emergency fund goal, I won’t be adding extra payments to Group B. With that in mind, this loan is estimated to be paid off around the 4th week of December.
EdFinancial Observations
Back in my previous update, I had mentioned about EdFinancial’s lack of automatic repayment options. When I started paying my EdFinancial account, I couldn’t find a way to make automatic weekly payments.
While there isn’t a complete option to make automatic weekly payments, I found that you can schedule your weekly payments in advance manually.
Also, I noticed that EdFinancial doesn’t allow you to make any payments on a weekend. This means that you can only schedule your payments on any business day. And that’s what happened to me. I moved my payments to every Monday, and the payment would get cleared two days after.
Final Thoughts
The balance as of October 13, 2021 for my entire student loan is $10,688.91!
I only have 10 weeks left for me to pay it off and I’m very excited in getting there this December. If I pay this off before the year ends, this means that I had paid off four student loan accounts in 1 year!
This is an achievement for me, and these wins definitely help in keeping my motivation up. I really want to pay off these loans and get out of debt fast, so I can focus on building wealth.
Nobody likes to have debt, so I condition myself everyday to think that there is a brighter side when all of these are paid off. I practice delayed gratification so the focus is on the goal in mind.
If there is a lesson about student loan payoff I can leave you before we end the video, it’s this one: delayed gratification.
Be patient and consistent in paying off your student loans. Think about the things you would get to do once you’re debt free.
That should be enough motivation for you to think less of the small things you worry about right now about your journey.