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Increasing Minimum Payments

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My student loans are on income-based repayment (just entering my 3rd year; the final year where my subsidized loans are still eligible for interest forgiveness).

One of the stipulations of IBR is that I have to re-apply every year. The re-application deadline for me falls in August. Its probably not surprising that, due to my increased income, my minimum payments are going up.

At first when I saw the email which notified me of the increasing minimum payments, I was bummed. “Dang it, that sucks” I thought.

But then it hit me – I’m paying like 10x the minimum payments right now (this is definitely hyperbole, but I still pay WAY over my minimums). So the tiny increase in minimum payments (I think it increased about $40/month) does not even come close to affecting me. After the realization, I laughed a little to myself.

Obviously no one likes when minimum payments increase. Thats what sucks so bad about adjustable rate mortgages! But at this stage in our debt payoff game, we’re focusing on the student loan payments. If we were still paying minimums on them in order to put more money toward a different loan, then this change might affect us. But given the massive sized student loan payments that we make, it literally doesn’t make an iota of difference to me if the payments increased $5 or $50. Who cares?! I pay way over the minimum anyway. I’m ready for them to be GONE!!!

Also, as just a random tidbit, when we first met with our mortgage broker with all our documents, he made a comment along the lines of “wow, I’ve never seen anyone with this much student loan debt!” I kind of chuckled (ummm…have you never done a mortgage for a doctor before??).  But not just because I was genuinely surprised by his inexperience with large student loan debts….I also chuckled because had I visited him 2 years ago, we would have been carting around an additional $50,000+ of miscellaneous debts, too! We’re in much better shape now than we were then! But, yes. I have a disgusting amount of student loan debt. Can’t wait to kick it all to the curb!!!

Just for fun – what are your minimum payments on your student loan debt? My Navient loan minimum payments are about $600/month. A ton of money, for sure. But when I’m paying thousands per month on the loans, a $40 increase doesn’t make a big difference.

 


Ashley’s April 2016 Debt Update + NEW Balance Transfer Loan

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Hi all!

Thanks for your patience with me as I was out of town and kind of absent (especially in the comments) for awhile. I only logged in a single time on our week-long vacation and then had to spend a few days playing catch-up with work-related obligations once I returned before really rejoining you here. LOTS of posts to come very soon, but for now let me get up this overdue April debt update!

Perhaps the first thing to note is that I initiated another balance transfer loan! I’ve labeled it in my debt spreadsheet as “Balance Transfer #2” (to distinguish it from the first balance transfer, which I paid off in full prior to initiating this new transfer). See my reasons for why I’m okay with using balance transfer loans to help pay down student loan debt in this throwback post.

I transferred $7,500 from my Navient student loans onto my Capital One credit card. I will have 0% APR for 12 months and paid a one-time $150 transfer fee. In my debt spreadsheet I list the new balance transfer debt as $7650 (which includes the $150 transfer fee). I also altered the “original debt” column of my Navient loan, reducing it by $7500 (since that debt has been moved to the balance transfer loan).

Here you go:

PlaceCurrent BalanceAPRLast Payment MadeLast Payment DateOriginal debt, March 2014
Navient$731686.55%$1476April$74218
ACS Student Loans$85966.55%$20April$8215
Balance Transfer Student Loan #2$76500% (through April 2017)$0transfer initiated April 2016$7650
Medical Bills$58360%$25April$9000
Balance Transfer student loan #1$00%-Paid off in March 2016$5937
PenFed Car Loan-2.49%-Paid off in January 2016$24040
License Fees-2.5%-Paid off in April 2015$5808
BoA CC-7.24%-Paid off in June 2014$2220
Mattress Firm-0%-Paid off in May 2014$1381
Wells Fargo CC-13.65%-Paid off in May 2014$7697
Capital One CC-17.9%-Paid off in March 2014$413
Totals$95,250 (March balance = 96,175)$1521Starting Debt = $145,472

One thing you’ll notice is that nothing was paid toward the new balance transfer loan in April. I initiated the loan toward the end of the month, so I’ll begin making payments this month (May).

Also, I edited the APR for my Navient loans. It used to read 6.55%-8.25%. But the balance transfer loan covered the 8.25% APR loan in full, so now all that remains are student loans with 6.55% APR. Wahoo! Excited to be chipping away at those loans and to get rid of my last remaining >8% APR debt!

Also, you’ll see in an upcoming budget update post that we continue to save toward our Emergency Fund and the down payment for a new home. This impacts our debt payments, as we are prioritizing savings above debt for right now. We plan to begin house hunting soon-ish, and once that’s all locked away we’ll again return our focus to paying down debt with a vengeance. In the meantime, I’m still happy with our current level of debt payments. Not too shabby, especially considering all our savings! Look for the budget update post soon!

I hope everyone’s weeks are going well! I’ll be back soon! : )


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