6 figure payoff

[radfam]

Hey all.  So i'm looking at my 6 figure student loan balance and scratching my head.  I've googled for success stories on paying this kind of balance off in any sort of time frame.  I hate this balance hanging over my head and want to pay it off sooner rather than later.  Currently on IDR, just because I didn't want to really mess with it.  Obviously this will never get me to payoff.

My question, has anyone here actually gotten to payoff?  If so, what was your payoff game plan?  Is there really a good option for planning to pay off this massive debt?  

I know this kind of thing is very situation-driven.  DH and I both have "good jobs", pulling in over $200k/yr.   We do have a mortgage and two car notes, 5 minor children, and a slew of CCs that we are chipping away at.  My SLs are sitting around $118k, DH around $50k.

[ccquest]

I've got $130k currently between federal and private loans. They are scheduled to be finished in 8 years without accounting for any salary increases, but right now I'm at 55k and $1200 is going towards them in total.

Federal loans will be forgiven under PSLF, private will be paid off, each is $65k though.

I'm planning to keep my car as long as I can, currently 3.5 years old and will be paid off in 3 years at which point the money that was going to the car note is going to the private loans.

If you're on an IDR plan, I believe the balance will be forgiven (but taxes owed as income on that balance) after 20 years of on time payments, right? That could be what you go for if you don't want to refinance the loans (I wouldn't if you're not entirely sure your job is secure).

[calyx]

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@radfam wrote:

My question, has anyone here actually gotten to payoff?  If so, what was your payoff game plan?  Is there really a good option for planning to pay off this massive debt?  

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So, my student loans are/were not as high as yours.   I have had two defaults (I know), so, so far my payback has been 55k for 20k worth of loans total. 

When I got my loans out of default last time, I was on ICR - which put my payment at ~260 and my total was just over 30k.  I actually put a MINIMUM of $500 dollars on top of that (so automated payment of ~760), PLUS any time I had any extra money, I would throw it at my SLs - 500 here, 1000 there.   My interest is 3.625%, which is still more than anything I can get from savings accounts, so, to me, I'm not "saving" money unless I'm paying down that debt. 

I am now on a standard plan, so my payment is ~300/mo, but I still pay extra.   And since the CARES act means that there is 0% interest at this time, I'm DEFINITELY throwing everything at the loan (like my $1200 Stimulus check) so that I'm steadily chipping away even faster.   My goal, every year is to pay at least 10k to the principle.     If my standard payment were higher, I might have stayed on ICR, because it's nice to know that should I need to use that extra money for another emergency, I could, but since I chipped it down so low that my standard was low enough to not sweat, I went there.

My ONLY issue with ICR, was that while you are paying ahead, it takes from principle *and* pushes the payment out, but when you recertify, you lose the pushed out date and it resets.   I wanted to use the SSL technique to keep an active installment on my credit report for the boost, and that would screw it up.   I had my current pushed out til 2022, but the CARES act reset that to October 2020 (not that I could do anything about that, if that's my biggest problem in life, I'll take it).    I have an autoloan, but after I get my SL paid down to ~200, I plan on shifting my extra payment to the car and knock it out entirely (my CU allows principle pay/paying early without penalty).

If everything goes according to plan, I'll be debt free towards mid/end of 2022.    If I liquidated all of my emergency savings/CDs, I could pay the SL off entirely right now, but I do like to make sure I don't have any emergencies.    This month I get furloughed, so it will be the one month I don't pay my SLs, though I could technically afford it, because I wanted to make sure I was comfortable with where I am as far as my ability to survive any emergencies.


In your case, you need to do what's comfortable for you, but I might suggest either the snowball method (paying the smallest debts first, rolling those payments to the larger debts) or the avalanche payment (what I'm doing, because finances > FICO), which is to pay the highest APR first and work your way down to save money (with your SLs falling wherever they fall in that line up).    Whatever works for you guys.    I use undebt.it (free!) to track my payments/progress - it's a pretty nice/easy site.  I pay for a sub, which gets you unnecessary extras, but I don't use it, I just like supporting the dev because it's such a great site for those working their way out of debt.

[ccquest]

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@calyx wrote:

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I use undebt.it (free!) to track my payments/progress - it's a pretty nice/easy site.  I pay for a sub, which gets you unnecessary extras, but I don't use it, I just like supporting the dev because it's such a great site for those working their way out of debt.

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Another one I use occasionally is unbury.us. Very simple interface and no account needed. The URL updates each time so if you want to bookmark that you can and it "saves" your data but it won't have any history like the one you linked.

[Anonymous]

I have 275k and just graduated law school. I went back as an adult so I'm really torn on whether it makes any sense to pay this off. I'm behind the curve on retirement savings and currently am focusing on that along with paying extra on my mortgage every month. 

I love the idea of getting rid of these loans but at the $600-800 per month I'll be paying for the foreseeable future, it's not much of a hit to my budget and I'm able to focus on retirement by paying the lowest amount possible. If I were younger, I'd probably go ham on them but at 42 it doesn't seem to make much sense.

[calyx]

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@Anonymous wrote:

I have 275k and just graduated law school. I went back as an adult so I'm really torn on whether it makes any sense to pay this off. I'm behind the curve on retirement savings and currently am focusing on that along with paying extra on my mortgage every month. 

I love the idea of getting rid of these loans but at the $600-800 per month I'll be paying for the foreseeable future, it's not much of a hit to my budget and I'm able to focus on retirement by paying the lowest amount possible. If I were younger, I'd probably go ham on them but at 42 it doesn't seem to make much sense.

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yeah 44, here, and honestly it's only because my loans are low and I am considering a career change which would put me back in professional school.   If I had your loans at that size, I'd cruise it out, too.

[Anonymous]

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@radfam wrote:

Hey all.  So i'm looking at my 6 figure student loan balance and scratching my head.  I've googled for success stories on paying this kind of balance off in any sort of time frame.  I hate this balance hanging over my head and want to pay it off sooner rather than later.  Currently on IDR, just because I didn't want to really mess with it.  Obviously this will never get me to payoff.

My question, has anyone here actually gotten to payoff?  If so, what was your payoff game plan?  Is there really a good option for planning to pay off this massive debt?  

I know this kind of thing is very situation-driven.  DH and I both have "good jobs", pulling in over $200k/yr.   We do have a mortgage and two car notes, 5 minor children, and a slew of CCs that we are chipping away at.  My SLs are sitting around $118k, DH around $50k.

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I have 135k in SLs that ranged from 2001-2010 and were originally 76k-ish before letting them slip away to default and stacking up on interest amd collection costs. My SO also is in the same SL situation woth now 76k on what was 39k in SLs. They all have been defaulted for years and I have been trying to hammer out a plan for us, once they are out of rehab.

I have considered consolidation, IBR, forgiveness after 15-20 years, refinancing, and plain ol' standard repayment, snowball, avalanche, etc. We need to get out from under them ASAP.

I make 135k, same as the amount of my SLs alone, but "taxable income", aka useable income, on any apps is more like 36-76k, and having a 1 income household, that's all we are working with. I would like to buy a home one day and these are weighing my DTI down *heavily*. The combined monthly payment of all SLs is around 1500+/mo, which I just can't have sticking around. That is as much or more than a mortgage! I have ran every pay off scenario I could work out. I considered 0% CCs once our credit improves and work them back to back as much as manageable, but I just don't see us getting out from under them for at least 6-8 years under any scenario. I mean, 10 years is standard repayment, so that isn't really great progress. I would love to own a home before I retire, jeez! I am 36 and this is seriously painful. I too need to save for retirement, as family/medical expenses forced me to cash out the 15 years worth of funds I had built up, ugh!

I would love to hear some pay off success stories to motivate me to continue fighting onward!

I really hope you can make a plan of attack that will help you reach your end goal of SL payoff!

Good luck!

[Anonymous]

@radfam If you are already on an IDR plan (, which one?), You may already be making "low" payments. If these are undergrad direct loans these will be forgiven in 20 years. Legislation is slowly catching up to each loan type imo. By the time some of these forgiveness really took around I don't believe they will be taxes as income. It's a bad look to put people, the majority of which live in debt, in debt again. 

If you won't qualify for forgiveness, then yes you need to look hardcore at how to pay this off in a timely manner without putting yourself in a bad position if your circumstances were to change (job loss etc.). Don't over-reach imo, because you're not getting the money back if you need it later. 

I'm on the forgiveness track though, so I really know a lot more about this method. If you have any questions, let me know. 

[radfam]

We are also behind the curve on retirement.  Thank you for sharing your perspective.  We've honestly just been riding the wave of low payments and leaving these on the back burner to reach other goals (home ownership, yay!).  Some days I want them paid and gone.  Other days, I stomach the idea of paying these realistically my whole life.  I don't foresee actually getting foregiveness at the 20-25yr mark.  Some of my loans date back to 2001.  I've consolidated them all into one about five years ago.

[romeo105]

Hey Friend and to everyone on this thread, 

1. Ya'll going about this the WRONG WAY (paying SLs/CC's/ Car loans)

2. Do Not refinance your loans unless you plan on paying them off aggressively in 3-5yrs (personal opinion here)

4. Do Not use snowball or avalance methods...the interest paid over the course of paying all these debts is still a killer

5. Based on your household income....you can possibly pay off your SL and CC in 3-4yrs or less

6. How? Have you heard of velocity banking? if no, ill give you a quick run down ( i may have some missing info but this is the grand                     overview)

7. In its simplest form.... you can use a SIMPLE interest lines of credit (ex. HELOC or a Revolving Credit Line) to pay off Armortized loans (ex.        SLs, Car loans, Mortgages)

8. What's the diffences btwn Simple interest vs. Armortized interest? << you may be already familiar with the differences  

    simple interest is DAILY interest and Armortized loans interest is FRONT LOADED, thus you can DRATISCALLY reduce the amount interest

    you pay if you redistribute/convert armotized loan to a simple interest loan (sort of).

9. What you'll need to first do is calculate ALL your monthly expenses 

10. Reach out to your bank and see if they offer REVOLVING lines of credits or HELOC

11. In essence (grand idea), you will take for example 3/4 of a line of credit  lets say 20k.. so thats 15k, and apply that 15K (chunk) to                    PRINCIPAL only payment. Your ENTIRE monthly income will be now deposited into the line of credit. Now, you might ask, i wont have              any money left? but you do, because you can redraw money to pay bills from the line of credit as they become due. Thus your line of               credit becomes "your checking account and savings account". The reason that you are depositing your paychecks strickly to the credit           line is to reduce the accrued interest on the line of credit and pay off it off in 4-6 months. Also, the reason you're not using the entire line         of credit is incase of an emergency, you can still make withdrawals. You repeat the process again (chunk of 15k) everytime you bring the

     balance of credit line to ZERO.

12. You may be confused now and probably have more questions. Such as, im still paying interest on the credit line so how im i saving? My 

        response to you is, the amount of interest that you would pay on the credit line compared to monthly interest of your armotized loans               over a years time would be so miniscule that we can say that "you paid no interest". You paying your loans off faster and SAVING on                 interest.

13. As mentioned earlier, this is the grand idea, im sure you have many more questions. Trust me this process works, its not a gimmmick.