Comments on: 10 Ways to Speed Up the Repayment of Your Student Loan http://studenomics.com/debt-reduction/10-ways-to-speed-up-the-repayment-of-your-student-loan/ Fri, 10 Feb 2012 19:14:42 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Jesse Rosenbaum http://studenomics.com/debt-reduction/10-ways-to-speed-up-the-repayment-of-your-student-loan/#comment-77390 Jesse Rosenbaum Fri, 10 Jun 2011 00:31:25 +0000 http://studenomics.com/?p=2389#comment-77390 Hindsight is always 20/20... When I graduated form college in 2009 I had a nice little nest egg saved up of about $8,000. I graduated with about $12,000 in debt and rather than unload my life savings right away into my debt I figured I would put some of the money away in a Roth ( I put in $3,000) and keep the rest as an emergency fund. I landed my first job out of college and was earning a whopping $25,000 a year. Which believe it or not was enough to meet my minimum expenses and leave a few bucks for beers and a meal out or two on the weekends. I was at a small company and when our Managing Director was canned for an ethics violation I knew I had to start looking elsewhere. You would be astonished how fast you can burn through your money when your circumstances change but your lifestyle doesn't. I burned through my safety net in a few months and there I was back to square one. While it was good to have the money when I needed it I am a big supporter or paying off as much of your debt as quickly as you can. Hindsight is always 20/20…

When I graduated form college in 2009 I had a nice little nest egg saved up of about $8,000. I graduated with about $12,000 in debt and rather than unload my life savings right away into my debt I figured I would put some of the money away in a Roth ( I put in $3,000) and keep the rest as an emergency fund. I landed my first job out of college and was earning a whopping $25,000 a year. Which believe it or not was enough to meet my minimum expenses and leave a few bucks for beers and a meal out or two on the weekends. I was at a small company and when our Managing Director was canned for an ethics violation I knew I had to start looking elsewhere. You would be astonished how fast you can burn through your money when your circumstances change but your lifestyle doesn’t. I burned through my safety net in a few months and there I was back to square one. While it was good to have the money when I needed it I am a big supporter or paying off as much of your debt as quickly as you can.

]]> By: Brian http://studenomics.com/debt-reduction/10-ways-to-speed-up-the-repayment-of-your-student-loan/#comment-56783 Brian Fri, 28 Jan 2011 02:12:14 +0000 http://studenomics.com/?p=2389#comment-56783 @FS - First, take your monthly payment (e.g. $150) and pay half of that every two weeks. By the end of the year you have added a month's payment without realizing it (26 half payments = 13 whole payments vs. 12 monthly payments). This should pay off your student loan a few years early. Second, I would take 1/4 of your savings and apply it towards the student loan. I don't like having debt, and I have lost sleep over worrying about it. Any time I can make a big payment towards the debt it feels great. I would then spend the next year rebuilding my savings and repeat the process. Its a double whammy psychological effect: pay off debt with a big payment and save money towards a concrete goal of rebuilding savings @FS – First, take your monthly payment (e.g. $150) and pay half of that every two weeks. By the end of the year you have added a month’s payment without realizing it (26 half payments = 13 whole payments vs. 12 monthly payments). This should pay off your student loan a few years early.

Second, I would take 1/4 of your savings and apply it towards the student loan. I don’t like having debt, and I have lost sleep over worrying about it. Any time I can make a big payment towards the debt it feels great. I would then spend the next year rebuilding my savings and repeat the process. Its a double whammy psychological effect: pay off debt with a big payment and save money towards a concrete goal of rebuilding savings

]]> By: Financial Samurai http://studenomics.com/debt-reduction/10-ways-to-speed-up-the-repayment-of-your-student-loan/#comment-13177 Financial Samurai Tue, 27 Oct 2009 13:33:48 +0000 http://studenomics.com/?p=2389#comment-13177 I've been thinking about this for a while. Debt is not necessarily bad, as one of my guest posters wrote about last week. In this scenario there's zero to negative carrying cost, so essentially, it's just a matter of time before the debt gets paid off in full. I like the "chip away" at it methodology given the low interest rate. If the rate was above 6%, that would be a different story. But, to have the flexibility to pay it off is a powerful call option. It's just accounting really, and that translates to how people pay for homes. It makes no difference if you put 0% down on a $1million home if you've got $1million in the bank, for example. Problem is, so many didn't don't have that level of DP, and hence our implosion. I’ve been thinking about this for a while. Debt is not necessarily bad, as one of my guest posters wrote about last week. In this scenario there’s zero to negative carrying cost, so essentially, it’s just a matter of time before the debt gets paid off in full.

I like the “chip away” at it methodology given the low interest rate. If the rate was above 6%, that would be a different story. But, to have the flexibility to pay it off is a powerful call option. It’s just accounting really, and that translates to how people pay for homes.

It makes no difference if you put 0% down on a $1million home if you’ve got $1million in the bank, for example. Problem is, so many didn’t don’t have that level of DP, and hence our implosion.

]]> By: Studenomist http://studenomics.com/debt-reduction/10-ways-to-speed-up-the-repayment-of-your-student-loan/#comment-13164 Studenomist Tue, 27 Oct 2009 10:50:25 +0000 http://studenomics.com/?p=2389#comment-13164 @FS I don't exactly have the "perfect" answer for your question. For me personally debt is a psychological issue. I do not like to be indebted to anyone. I pay back all of my debts as soon as possible. Whether I owe a friend $5 for lunch or $5,000 in student loans, I do not want to carry any debt. In your example, I wouldn't pay it off right away but I would pay it off as quickly as possible. I personally don't want to get into the habit of investing money that isn't mine. What's your take? @FS I don’t exactly have the “perfect” answer for your question. For me personally debt is a psychological issue. I do not like to be indebted to anyone. I pay back all of my debts as soon as possible. Whether I owe a friend $5 for lunch or $5,000 in student loans, I do not want to carry any debt. In your example, I wouldn’t pay it off right away but I would pay it off as quickly as possible. I personally don’t want to get into the habit of investing money that isn’t mine.

What’s your take?

]]> By: Financial Samurai http://studenomics.com/debt-reduction/10-ways-to-speed-up-the-repayment-of-your-student-loan/#comment-13142 Financial Samurai Tue, 27 Oct 2009 04:35:21 +0000 http://studenomics.com/?p=2389#comment-13142 Question for you guys. What if you had $30K in student debt at 2.6%, but had much more than that saved in the bank earning anywhere from 2%-4.2%. What would you guys do? Chip away at it every year to accelerate payment? Or, just pay it off at one go? Question for you guys. What if you had $30K in student debt at 2.6%, but had much more than that saved in the bank earning anywhere from 2%-4.2%. What would you guys do? Chip away at it every year to accelerate payment? Or, just pay it off at one go?

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