How To Pay Off Student Loans Over 100k

How To Pay Off Student Loans Over 100k – One of the best things I did after graduating from law school was pay off my student loans quickly. This gave me a lot of flexibility in terms of how much I would earn.

When my student loans are paid off, I don’t have to work to earn a certain amount of money so I can invest some of it in other student loan companies. And I can rest easy at night knowing that I don’t have to keep paying for the role I won years ago!

How To Pay Off Student Loans Over 100k

Interestingly, even though I know how much student loans I have to pay, I never really look at what I have

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I thought it might be an interesting trip down memory lane to analyze this information, so a few weeks ago I requested my payment history from my student loan providers and looked it up.

Before we get into that, it’s worth looking at how I got these student loans in the first place. I went to a law school that offered me a 50% scholarship, which was a pretty smart decision since my other options were more expensive and would have put me in a lot of debt. When I entered law school, I made it a goal to continue to spend my money at the level that I thought was appropriate.

Although the scholarship helped me to reduce the cost of my studies, it still cost me a lot in terms of study and living expenses to achieve these three years.

As you can see, I have 8 different loans for different amounts. $25,000 of these loans have an interest rate of 7.9%. The rest were at an interest rate of 6.8%. In total, my total debt for law school was $86,500.

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I also have $552 in student loan balances from college that I can’t pay off. As a result, my total student loans when I graduated from law school were $87,052.

That’s a good amount of student loans for a 26-year-old starting his first real job. Let’s start paying them!

I graduated from law school in May 2013 and started my first job in September 2013 at a large law firm in the Midwest. Since I graduated, I had a 6 month grace period and didn’t pay off my first student loan until December 2013.

I don’t remember exactly why I did it, but I made some extra money on purpose before my official loan. This is what my student loan payments looked like in 2013:

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What most people forget about student loans is that they continue to accrue interest while you are in school. So when I paid off my first student loan in August 2013, here’s how it went:

Oh! The $750 payment doesn’t even touch the principal amount of the loan. I’m literally wasting money here.

However, I don’t understand the purpose of the capital letter. For those who don’t know what this is, generally once your student loan comes due, any unpaid interest during your school years is added to the principal amount and becomes the amount of your new loan unless you default. interest payment. to his greatness. Remember the $750 one-time loan payment? This is how this loan handles capital:

Do you see what happened now? A $12,000 student loan suddenly became a $13,682 student loan! During the three years I was in law school, the interest increased, and once the loan was paid off, the unpaid interest was paid directly to the principal! It’s bad because now I have to pay back the capital gains and all the new gains that accrue. And this is not the only loan that has been collected. He got three more loans that added up to thousands in the capital.

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I consider 2014 to be the first year I started trying to pay off my student loans. As a first-year associate, I earned an annual salary of $110,000, so I had enough income to take a big loss on my loan. All I have to do is avoid the trap of the lawyer lifestyle that many of my colleagues fall into.

Oh! I know I owe a lot, but I never realized how much until I wrote it all down. Here’s a great chart showing my student loan repayments in 2014:

I can’t help but think about the big bill I paid in October. I had a pretty good emergency fund at the time, so I guess I decided I didn’t need all that money and put a bunch toward my student loans.

You may be wondering why my payments vary so much from month to month. Most of this is due to the mistake of stopping paying extra every time I see my bank account getting too big. I wanted to avoid what I call stagnant wages, which is why you see occasional peaks and dips throughout the year.

How To Pay Off $100k In Student Loans

In 2015, I was promoted and my annual salary increased to $115,000. In addition, I have a good income to work here. Here’s what my paycheck looks like in 2015:

Looks like 2015 is off to a great start. I got a little extra money from my emergency fund to start the year, so you see that big increase at the beginning of the year. I’m not entirely sure why I did this, but my best guess is that I listened to a ton of Dave Ramsey and was very active in reducing that weight. However, the money in the emergency fund did not generate much interest, while the debt repayment guaranteed a return of 6.8%.

As you can see, my money still increased in 2015. I continued to make payments as the extra money accumulated in my bank account.

Another big thing I did was to use three months salary to pay off my loan. I get paid every two weeks (like a lot of people), so twice a year I get three checks a month. Because I live comfortably on just two payments a month, every time I get a third month of payments, I put the entire third payment toward my student loans.

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One of the mistakes I made when paying off my student loans was not refinancing them the first year I paid them off. If you’re like me and plan to pay off your student loans quickly, then there’s no reason not to wait to repay your student loans. Refinancing means you lower your balance, which means you pay less interest overall and have more money working for you.

I repaid my student loans three times while paying them off (most people don’t realize that you can refinance your student loans as many times as you want). Below are three companies I used to refinance my student loans:

If you’re not sure which company to refinance your loan with, a good option is to use a company that can match you with multiple student loan consolidation companies at once. These companies are like Kayak or Priceline student loans. You can conduct a search and all the possible deals you can find will be displayed in one place.

My advice is to refinance your student loans with SoFi first; This way, you will have access to all the events that are free for SoFi members (remember, you can attend these events even after you pay your SoFi loan).

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Then refinance your student loan with Credible and choose the company that offers you the lowest interest rate. If you do, you’ll get all the benefits of a one-time refinance with SoFi (ie you’ll attend all SoFi events) and get the lowest interest on your student loan (plus an extra $200 to use with Credible to refinance your student loan) . debt).

Or, if you’re like me, you can go crazy and refinance your debt with almost any company. That’s pretty much what I did, and while it wasn’t necessary, it allowed me to get a lot of bonus signups.

If you’re confused about refinancing, be sure to check out my post about my student loan refinancing experience, where I share exactly what I did when I repaid my student loans. You can read this post here: Student Loan Refinancing Experience.

I started 2016 with another raise, this time to $125,000 a year. Additionally, he has enough income to pay off these loans quickly, assuming he doesn’t fall into the lawyers’ trap.

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So what happened here? Why did I pay so little for the first 5 months and then suddenly stop?

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