How I Paid Off My Student Loan in Less Than 5 Months (After Letting It Languish For 9 Years)
I borrowed about $19,000 back in 1997 in order to finish graduate school. (That was stupid and completely unnecessary on my part, but that’s another story.)
This is the story of how I paid off the balance of my student loan in less than five months.
After borrowing the money in 1997, I paid sporadically on the loan when it entered repayment. There were months when I paid nothing but interest due to the loan being in forbearance, etc. There were also months when I paid $200 per month, which was my agreed-upon larger-than-minimum monthly payment.
Then end result was that by June of 2006 (9 years after taking out the loan) I still owed $9,759.46.
By October 17, 2006 — less than 5 months later — I owed zero.
How did I do it?
It wasn’t by getting a fancy job with a big salary. (I brought home about $2100 each month.)
It was by focusing solely on that debt. For a little more than 4 months, I woke up every single day thinking about how I could pay off the debt as quickly as possible.
Could I make extra money somehow? Could I get started with some passive income ideas? And what about expenses? Could I cut them? Start tracking them so I’d know what my expenses even were to begin with? Could I send in multiple payments each month to the loan in order to pay less interest? Could I get a discount on the stuff I absolutely did have to buy?
The answer to all of those questions was yes. I was consumed by paying off that debt. And it worked. The more I sent in, the more I wanted to send in, and the more fired up I got.
By the end of September 2006 I had paid off $5359.28 of the debt, leaving a balance of $4400.18.
Finally, the obvious hit me during a conversation with my husband. I was telling him that I didn’t understand why people who had the money to pay off a debt didn’t do it, when it dawned on me that that described ME. I had some money in the bank that I had been saving up for emergencies.
It hadn’t occurred to me to use that money to pay off the balance of my debt until that moment, because the money in the bank made me feel secure. But that feeling of security was really just an illusion, and I was paying more on my debt each month in interest than I was earning on the money in savings.
So I withdrew the balance of what was needed to get my debt paid off and sent it in. That’s when my life changed — the moment I felt what it was like to no longer having a debt like that hanging over my head — to be free of worry and stress related to it, and to have money to do whatever I wanted to with each month.
Do you have a debt related story to share? I’d love to hear it.