“Loans” Archive
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Now that our credit card debt is gone, a reader asked what our next step is going to be.
Dave Ramsey suggests paying the extra amount on your lowest debt (which would be the student loan) but the minimum payment on our truck is more 4 times higher than the student loan. Plus, the interest rate on the truck is twice as much.
Another good reason to pay more on the truck is to quickly rid ourselves of the hefty payment. In the event of job loss, a student loan can be deferred due to financial hardship – auto loans are not nearly as forgiving.
We’re hoping to have the truck paid off in 10 months or less.
Here we go!
Here are the current numbers (I’ll work on getting the sidebar updated):
Total Starting Debt: $38,495.86
Total Paid: $16,727.33
Total Remaining: $21,768.53
Breakdown of Remaining Debt –
Truck: $11,934.57
Student Loan: $9,833.96
We’re nearly halfway there. I got an updated payoff date according to our Debt Snowball Calculator on DaveRamsey.com…
December 2010.
We shaved off 4 months so far. Can I get a Woo Hoo?
Dear State of California College,
First off, I’d like to thank you for cashing my husband’s tuition check within 12 hours of receiving it. Who knew that was even possible? Though to be honest, I’m not quite sure why we pay two months in advance and are later reimbursed. It kinda sounds like a man I heard about… what’s his name? Ponzi?
Second, I recently received your request for an additional $150 per semester – as if the two thousand I just paid you was completely insufficient for a whopping six units… and let’s not discuss your $200 parking pass shall we? I was amused at the complete ambiguity as for the reasons why the additional funds were needed from all 30,000 or so students but I was NOT amused when I actually had to pay it. But hey, thanks for allowing me to defer this unexpected payment for three weeks. I guess that’s supposed to help me be happy about paying more and getting less? I have approximately $26 in my checking account. Clearly, I cannot spend $150 when I only have $26. Who do you think I am? The state of California?
Also, I want to thank you for delaying the receipt of my husband’s tuition funds for two months. Perhaps you are trying to help the business students perfect the art of living off ramen noodles and tuna and hone their negotiating skills with creditors?
When we called to check the status on the cash flow, you said the check was ‘in the mail’. 3 weeks have passed. Are the checks being personally delivered by a three legged dog on a skateboard? In short, in response to your request for additional funds…
The check is in the mail.
Sincerely,
The broke wife of a California college student
Oops! Some readers have recently posed the question…
Why don’t you sell the truck?
I neglected to explain the reason we’re carrying the truck payment. It’s funny that no one noticed the debt on the truck earlier. It wasn’t until we paid down enough on the rest of our debt to make the truck HALF our total debt that someone asked about it.
My husband had a Chevy that gave out on us a few years ago and he’s one of those few people who actually need a full size truck for work. He tows trailers, fills it with concrete, moves landscaping, etc. A reliable full sized truck isn’t an option… it’s a requirement. We financed a Toyota truck for 26K two years ago and at the time, it was a great deal – or at least that’s what everyone likes to think after leaving a used car dealer.
Fast forward a few years, a few gas hikes, and a few construction related dents later and suddenly…
The truck is more than just a little upside-down – it’s hanging from its toe nails.
We’d MAYBE be able to sell it to someone for 8K… if we made them test drive it in the dark and promise them it got 58 miles to the gallon completely powered by canola oil. But since we’re honest folks, that’s not an option. Plus, we’d have to buy another full sized truck reliable enough to take the 25 – 30 thousand miles a year he drives for work.
Take the nearly 5 thousand we’d have to pay for our upside-down loan and add it to the cost of another truck and it just doesn’t make sense. I’d rather bite the bullet, pay if off by mid-year next year, and have a truck I know works for us.
I’d like to thank you for offering me a loan when I needed it — *cough* — I mean, when I WANTED it.
While our relationship has been great and I have appreciated your monthly letters of good tidings, I’m afraid I have to end things. You see, I recently met with my tax man and he told me we’re getting back a small chunk of cash which means… all the money I’ve been saving can finally be used to rid myself of you.
I know you have lots of friends like me and you probably won’t miss me but I’m sure you’ll miss the nearly two years of interest I would still owe you if we continued to be friends.
Please don’t take this personally, your service has been exceptional. We’ve actually got along quite well the past few years but it’s not you… it’s me.
I wish you the best in your future endeavors… none of which will involve me.
All my love, but none of my cash,
Rebekah
It’s always nice to receive any money in the mail, even if it happens to only be $4.19. I guess that is the amount that I overpaid on my car loan. I’m not quite sure how that happened since our car payment was on automatic payments since day one – but I won’t complain. Receiving the money was a nice treat.
We also received the original loan papers and it had “PAID IN FULL” beautifully stamped in red across the top. Perhaps I never really paid attention before, or perhaps I was in denial, but it says right there that the total finance charge for the loan was $3,541.90. That added another 25% to the cost of our car. 25%!! What were we thinking back then??
Lesson learned – attempt to purchase next car with cash, if possible.
After 5 years of payments, our car is paid off. The last payment was actually due on Monday but the company initiated the payment on Tuesday for some reason (we’ve always had automatic payment on this vehicle).
I waited to announce on here until I saw the following:
The car is officially ours and no more car payment!
We could snowball that payment to other debt, but it looks like it will be used for health insurance. My husband and I do not have any, and the plan my son is on will be lost at the end of the year.
Of course, I will write more about that once I make some progress on getting that ready. The to-do list that I wrote to myself some time ago is not shrinking as quickly as I would like.
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About This Site
My Debt
- Original Debt: $97,293.06
- Paid: $1,927.89
- Remaining: $95,365.17
- Emergency Fund: $1100
- Broken Down
- Line of Credit 2: $0.00
- Line of Credit 1: $0.00
- Credit Card 1: $0.00
- Credit Card 2: $245.00
- Credit Card 3: $405.00
- Credit Card 6: $1,785.00
- Credit Card 7: $2,381.17
- Consolidation Loan: $11,000.00
- Credit Card 10: $14,519.00
- Auto Loan 1: $16,093.00
- Credit Card 11: $23,873.00
- Auto Loan 2: $25,064.00
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