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Advice on paying back student loan

Member

Advice on paying back student loan

I have a small student loan, the balance as of today is $1700. The interest rate is 6.55%. The minimum payment is $13.95. Estimated payoff date is 4/15/2024.

 

I have been making $25 monthly payments.

 

In the last 6 months, I have paid $150 but my balance has only reduced by about $78 Smiley Frustrated

 

My question is- is it worth it to even pay the extra few dollars a month? I feel like everything is going towards interest anyway ... 

 

Thanks!

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Super Contributor

Re: Advice on paying back student loan

Student loan debt is the worst type of you can haver so the sooner you get ride of it , the better.

06/13/2018: FICO 821 EQ 814 TU 808 EX
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Established Contributor

Re: Advice on paying back student loan

Interest on student loans are compounded daily, so it never feels like you're getting ahead. But, you will, eventually.

 

Paying $25 each month should have that loan paid off about 2.8 years early off a 10 year term (plugging in your numbers into an amortization calculator, total time to pay with payments of $25 is about 7.2 years ). 

 

If you can afford to pay more, I would. $50/month would pay off even faster (in 3.2 years versus 10).

 

Hope that helps.

Garden Club Member since 4/1/2018
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