I consolidated the loans (each semester was considered a new loan) in July 2003 (so 9 years ago). Almost immediately, we put them in deferment. The kids were not even a year old; I wasn't working. We were still dealing with the aftermath of their birth and adjusting to EVERYTHING.
When the deferment ran out (I don't remember when that was), we went back to paying the loan. Then the "brilliant" financial planner talked me into putting the loan in "interest only" payments to increase cash flow. That was only good for 2 years, so I knew it would revert to "interest and principal" in October 2011 (for long time readers, I had talked about my student loan payment going from $90 to $229, and why we needed to have G-man's car paid off by then).
All of this seemed to make sense at the time, as I was really only looking at our month to month costs.
DUMB. I so wish I knew what I know now. In reality, I wish I had paid off my undergraduate loans way sooner, so I could have tackled the graduate loans sooner, and be done with all of this. But hindsight.....
Anyway, I looked at the current loan....and when I actually saw the numbers (based on my current statement), my jaw hit the floor.
- Original loan amount: $30,303.17
- Total principal paid: $4,128.43
- Total interest paid: $7,851.38
UGH. DISGUSTING. Almost $8,000 in interest....that could have gone so far towards other things. UGH. And the current payoff date is July 2024. 12 year more to go, on top of the 9 I have already put in. Ridiculous.
So, I am considering going on auto-debit for the loan, which will reduce the interest by 0.25% (not alot, but it all counts), and increasing the payment by $20 a month (not alot, but this will get adjusted). That makes the payment a round $250 a month. What I have to find out is if the extra money will go to principal, or interest!!! I am not paying more to interest, thank you very much.
So to my friends out there, look at the big picture. It may seem like a good idea to drag it out, since student loans have a low interest rate (mine is 3.375% fixed). But it all adds up. Just look at mine.
Anyone else ever look at their loans like this and just feel sick?