20 Year Student Loans?!

[guppy]

I am ashamed to say, but when I graduated from college I transferred my variable rate loans to a company who would make my interest rate fixed and extend my student loan to 20 years (since lower monthly payments sounded like such a great idea). 3 years later I see how ridiculous and uneducated this devision was since my husband and I make more than enough money and should've left it variable and paid it all off as fast as possible. My interest rate is now 6.6% and I'm paying ~160/month for approx $21,000 loan. Don't you ever wish you could turn back the clock?!

How's everyone else doing with paying off debt?? I started getting more serious about my finances about a year ago. We paid off 5,500 in credit cards (which we started using more sparingly and pay in full at the end of each month since then) and 4,500 on a car loan in the past year. Right now we're working on paying off my husbands last student loan that's at about 5,000 left and after that we start tackling my student loan (as mentioned above) at 21,000. I've figured we can have all debts besides our rental property mortgage and our home mortgage paid off by December 2010!

So in conclusion, I LAUGH IN THE FACE OF THE 20 YEAR LOAN and I will overcome my past financial indiscretions.

Ok, so not much point to this post, I just wanted to let everyone know that this is all a work in progress and as long as we continue making baby steps in the right direction, we'll get through it! Hope everyone else is making out well with tackling that debt!

[swanson719]

Good job so far. You've paid off $10,000 in the last year and have $26,000 to go - that's really good. When we started in February '08 we had $13,000 on my car, $5,000 on DW's car, and $2,000 on her only credit card. It took us a full year to pay it off, 5 months of which I was deployed with my only costs being phone cards and food, and DW was living with her parents during that time. We bought and furnished our house with the extra I made while away, and took the first time home-owner credit to pay off the last bit of my car note and start our EF, which we're a little over halfway done with. We plan on it taking a full 2 years from starting to get out of debt, finish the EF, and get our regular accounts up enough to be able to have DW be comfortable without having to worry about the EF. We also contribute to our Roth IRA's, but only about $5,000 a year between the two of us. It's a start. The goal is that this time next year we'll be able max them out and be saving for an adoption and paying down the mortgage.

[disneysteve]

My student loans had 25-year repayment plans in the original terms. I didn't take that long to repay them. My goal when I graduated was 10 years. Due to a job change and pay cut, it actually took me 12 but that was okay with me.

[destiny10]

take your time in paying the loan. there are other things to worry about like mortgage, car, raising a family et cetera.

[emilywebster07]

Very inspiring stories from the fellow saver.

[guppy]

Thanks for the words of encouragement and all your stories! It's so empowering paying off debt! I started getting so into it that I have this customized spreadsheet now that tracks all of our paydays for the next year! I know, a little overboard, but its nice to play around with the numbers and see where every penny is going. I am tempted to pay down the variable rate rental property home equity i have ($94,000) before my student loan. I figure if we pay that down as fast as possible (before rates start climbing - i figured it'll take approximately 4.5 years) then we can focus on my student loan (21,000) at that point. I haven't quite figured out which one I want to apply my money towards, but I have until December to figure that out (when the loan we're currently paying gets paid off and we've built up a little more EF) so I'll just mull it over until then.

[quizbiz]

God this scares me. I'm going to a college that I shouldn't be able to afford but its a fantastic school and I am willing to work hard during it. Parents will help a little.

[mnpqrd]

If there is no prepayment penalty then you can always send additional principal payments to shorten the loan length. I paid mine within a year.

[Runaway Finances]

quizbiz, I'll make one comment regarding student loans. It is generally not the tuition and books that cause big loans, it's the living expenses. DO NOT live off of student loans. Use student loans only for books, tuition and fees. This is really tough I know, but there are lots of scholarship money out there. If you are not receiving parental help, then take the effort (it is huge) to apply for scholarships. They come in $500, $1000, etc. increments, but you will be surprised at how much is out there especially if you are low income. I have read stories and known several people who have paid for 4 years of college with scholarships all in small amounts. So, work real hard at it.

Guppy, way to go!! Don't beat yourself up on your decision to switch your loan. Read your agreement and see if you can prepay without penalties. If so, you can make extra principal payments when you want.