Previously I posted about tricks I was using to pay off my ridiculous amount of student loans and the little strides I was making to cut those down. If you’re a long time reader, you probably noticed I promptly stopped talking about it. This wasn’t out of laziness but more out of shame because I backslid majorly during most of last year.
From the end of April to the beginning of December last year I was unemployed. I searched endlessly for a job, but all I had to support myself was unemployment and some money here and there from temp work and freelance projects. Unfortunately that was not enough to make my private student loan payments of $1021.59 each month (my federal loans were in unemployment deferment). I was determined not to go into forbearance again, because that’s how my student loan payments ballooned so much in the first place.
To make up the difference each month I drained my savings account until it reached the minimum I needed to have to keep the account open ($300) and then I had to start borrowing money from my boyfriend to make the payments. Then we reached a point where we couldn’t afford to make the student loan payments and pay our other bills.
I still did not want to put my loans in forbearance, so instead I started making two payments on my loans. When my due date came, I would pay what I had and then pay the rest as soon as I had the money. Luckily enough, Sallie Mae has a grace period of about two weeks or so after your bill is due where you can still pay without any penalties or late fees. I did that for a couple months, but as a result each month my monthly payment amount was slowly rising because I was being charged extra interest on the amounts I didn’t pay in time each month.
This became a vicious cycle where I couldn’t keep up, but then I got lucky and scored two part-time jobs and was able to catch up on my payments so I’m paying normally again. Even though I recently quit my seasonal job, I should still make enough money to cover my student loan payments as long as I’m smart with my money and stick to my budget.
Now that I am back on track, my monthly student loan payments are $1024.70. That’s 27 cents more than when I started making payments in January of 2009. I’ve basically undone all of my work and then some. Now I’m ready to get back on track.
I filed my tax return two weeks ago and received my refund on Friday. I decided to be smart with my refund money, so I transferred half of it to my savings account and used the other half to make an extra payment on my student loans to the amount of $650. I don’t know how much of a difference it will make, but hopefully I can lower that monthly payment soon and get back on track with snowballing away my debt. I will continue to round up my payments each month and pay whatever extra I can.
From now on I hope to do monthly updates on how my debt repayment is going. After I receive my next Sallie Mae bill and see how the extra payment effected my bill amount I’ll post an update. For now, I’m just excited to be back on track.