I kicked sallie mae out of my house last week!!!

[Dred Pirate]

Finally - 16 years after graduating with 120k in loans (but still 9 years early) I finally send my last payment. I pissed around for too many years because of the low interest rates, but finally decided to get serious and paid about 32k to my loans this calander year. Humble brag - I was able to do this despite having a young child in day care and my wife reducing her hours after the birth of our child. Less traveling due to COVID freed up some money, and I put off some of my Roth IRA contributions, but to have that weight off my shoulder and the freedom to be able to have some flexibility when it comes to future job changes, makes it worth it.

Lesson from me - work your butt off and get those loans taken care of, less stress, more freedom, etc. Work your butt off when you are young (if you are able to get the hours), control spending, (don't have to be a tight wad, but be smart with cars and housing).

---

Members don't see this ad.

 

[footfairy]

Finally - 16 years after graduating with 120k in loans (but still 9 years early) I finally send my last payment. I pissed around for too many years because of the low interest rates, but finally decided to get serious and paid about 32k to my loans this calander year. Humble brag - I was able to do this despite having a young child in day care and my wife reducing her hours after the birth of our child. Less traveling due to COVID freed up some money, and I put off some of my Roth IRA contributions, but to have that weight off my shoulder and the freedom to be able to have some flexibility when it comes to future job changes, makes it worth it.

Lesson from me - work your butt off and get those loans taken care of, less stress, more freedom, etc. Work your butt off when you are young (if you are able to get the hours), control spending, (don't have to be a tight wad, but be smart with cars and housing).

Good job! I know conventional wisdom says that you should pay the minimum if your interest rates are low, but on a comfort level it's a great feeling to be done with loans!

Way to achieve something during this miserable year!

 

[quickpic007]

SUPER CONGRATS!!!

Don't start a new big debt burden now!

 

[PRex825]

I am super jealous haha. Way to go! Currently 8 years in on my approx. ~200k (yup- one of those people... partially in my defense, 20k+ of that was a loan in my parents name that I paid off for them ASAP after graduation). Hoping to have them gone in 2-3 more years (and still live a normal lifestyle with a wife and kid).

 

[mentos]

Congrats! Make sure to max out your 401k and Roth now. You have more money to invest now!

Will you be paying your mortgage down or making minimum payments? I'm still debating what to do for that, been making small principal payments so far and investing the rest.

 

[Dred Pirate]

Good job! I know conventional wisdom says that you should pay the minimum if your interest rates are low, but on a comfort level it's a great feeling to be done with loans!

Way to achieve something during this miserable year!

already do the 403b, and did the Roth until this year when I decided to clear out the loans, but will start back up on it. I am debating savings up $ in a taxable account or paying down the mortgage (already have 40% equity and rate is 3.375) Since we will probably move within 3-4 years might just save up for a big down payment incase the we don't sell as fast as I hope

 

[mentos]

already do the 403b, and did the Roth until this year when I decided to clear out the loans, but will start back up on it. I am debating savings up $ in a taxable account or paying down the mortgage (already have 40% equity and rate is 3.375) Since we will probably move within 3-4 years might just save up for a big down payment incase the we don't sell as fast as I hope

Might be worth it to refinance. You could probably get mid to high 2s now.

 

[Dred Pirate]

Might be worth it to refinance. You could probably get mid to high 2s now.

Not without paying closing costs that may take 4-8 years to recoup - I checked last week and a no-cost was 3.25 from two different places.

 

[Momus]

Grats on picking the right wife this time!

 

[Dred Pirate]

Grats on picking the right wife this time!

haha - so true!!!!!!

 

[mentos]

Not without paying closing costs that may take 4-8 years to recoup - I checked last week and a no-cost was 3.25 from two different places.

4-8 years?? My closing cost was around $2800. My monthly payment went down by about $300 so I'll break even in less than a year.

 

[Dred Pirate]

4-8 years?? My closing cost was around $2800. My monthly payment went down by about $300 so I'll break even in less than a year.

I think it depends on loan amount and interest savings. $100 per percentage point for every 160k borrowed. I owe 20k, so for every 1% drop I save $130 a month, to get a drop of 1/2 point I would pay ~$2500. 2500/65 = 40 months.

 

[mentos]

I think it depends on loan amount and interest savings. $100 per percentage point for every 160k borrowed. I owe 20k, so for every 1% drop I save $130 a month, to get a drop of 1/2 point I would pay ~$2500. 2500/65 = 40 months.

Oh pfft if you only owe 20k then I'd just pay that off after maxing retirement accounts.

 

[Dred Pirate]

Oh pfft if you only owe 20k then I'd just pay that off after maxing retirement accounts.

typo 209 k - my bad

 

[pezdispenser]

4-8 years?? My closing cost was around $2800. My monthly payment went down by about $300 so I'll break even in less than a year.

You should look at the interest saved when determining breakeven, and not how much the monthly payment goes down because it can go down simply by extending your mortgage term even if the interest rate stays the same, but you could actually pay more interest over the long-run.

To estimate how much interest you save in the first year, just take your balance e.g. $200k x [interest rate reduction e.g. 0.01 which is 1%] = $2k interest saved in 1st year, and compare that to your closing costs. The interest goes down each year as you pay down your balance.

 

[mentos]

You should look at the interest saved when determining breakeven, and not how much the monthly payment goes down because it can go down simply by extending your mortgage term even if the interest rate stays the same, but you could actually pay more interest over the long-run.

To estimate how much interest you save in the first year, just take your balance e.g. $200k x [interest rate reduction e.g. 0.01 which is 1%] = $2k interest saved in 1st year, and compare that to your closing costs. The interest goes down each year as you pay down your balance.

I refinanced less than a year after buying the house. Original rate was 3.75% at 608k, now it's 2.875% at 592k. So 0.875x592k = 5180.

 

[mentos]

Damm. Pricey house. Cali?

New England.