"sno-ball" or consolidate??

[scarrollprint]

Snowballing is usually a better choice however what % could you get if you consolidated vs what are your % now? if you could get a much lower % if you consolidate than your weighted average % now - it'd be better to consolidate just since in the end it'll cost you far less in interest.

If your going to snowball though - don't attack the fixed % that are the lowest...they can't go up and you know its not going to cost you any more even if it your smallest loan - your not going to save THAT much money by knocking off a year on a 2k loan.  When I snowballed my debt I attacked the highest/unstable APRs first didn't matter if they were my smallest or largest debts while making minimums on the rest. After each loan was paid off I would apply that payment to the next highest to the point where I only had 2 left which I consolidated since I could get a fixed rate (was variable but fixed with consolidation) and lower than my previous fixed rate of the other loan.

just a thought, if you pay off the higher interest rates first not only will you pay it off in the same time frame, you'll also have spent far less money (i.e. will take off even more time)

[scarrollprint]

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@sge760 wrote:

I'm currently doing the same thing as you.

You should try to request forebearance due to financial hardship to temporarily postpone your payments for 12 months.  They didn't ask me for any paperwork.  I just click the "request forebearance" button through the website and was approved.

This will allow you to focus on each individual loan until they're paid off, and then move on to the next loan without having to use part of your funds on the minimum payments for the other loans.

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when you go into forebearance you still are racking up interest though. So unless you can pay off a couple loans within like 2 or 3 months and then put a substinal amount towards interest it would be a far better idea to at least pay the minimum while focusing any extra cash on which ever one you choose first.

Edited to AD: plus you also miss out on the tax deduction for any interest paid for that year on that loan. In the end you'd be paying more and loosing out on your taxes as well. I do not suggest forbearance unless you NEED to ask for one (i.e. can not pay your loans at all at that time) which does not seem to be the case for OP

[jamesdwi]

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@j_casteel wrote:

I have alittle over $94k in student loans. I'm planning on paying them off within the next 5yrs. I have sold my truck, and we only have my wifes car now. I plan on just getting a cheap car to drive "A to B" in. All credit card debt is paid to zero balance, and i only use them like debit cards and PIF each month. I am planning on selling my house that is in a different city than we live in that has been a rental property for a few years now. Once that house sells the student loans will be the only debt I have. My mother in law moved to Florida and gave us her house to live in free. I am using this opportunity to pay off my student loan debt much faster than the 15-20 year payoff. My wife and I both are very fortunate to have great jobs with great salaries, and live approx. 2.5miles from downtown where our offices are.

So anyway, I have several small student loans ranging from $1400-$2500, and then 2 medium sized loans $9k and $13k, and then 2 bigger loans $27k and $29k. I have came up with 2 different payoff scenarios:

1. A sort of sno-ball method; I plan on paying off all the "small" loans within a year while making the minimum payments on the others. Then paying the medium 2 loans off in roughly 16mths while making the min. payments on the 2 bigger loans. Then taking roughly 3yrs to pay the 2 large loans off. That would put me around the 5yr mark give-r-take.

2. Another option was to try to consolidate the ~$94k, and just finance it for 60mo paying roughly ~$1700-$1800 per month for 5yrs.

Our goal is to be able to have zero debt when we go to buy our next home and land. We are very fortunate to be able to live in a free home, and have the jobs we have and want to take this opportunity to use the blessings that God has given us to take care of everything we can.

Let me know what you all think of my plan and if you all have any suggestions please feel free to let me know.

Thanks,

John

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don't consolidate 1700, one minor hickup in income  or familty issue and you have a missed payment and a 30 day late on your credit. If you don't consolidate the worst case is you make minimum payments for a month or two, and your plan takes 2 months longer and all is fine...  2 months late on $1700 payments means finding $5100 to make a catch up and current payment, not easy to do.  

[j_casteel]

haven't updated for some time, but i have been working on the sno-ball method.

i appreciate everyones help and advice.

-John