Oh Government you think you are so smart, with your low interest rate, meagre minimum payments and length of payback period. I’m on to you. I shall not play your little game. Ever.
Let me just state for the record: I absolutely hate my student loan and I want it gone. Like yesterday or the day before that. The thought of paying a loan for 12 years is the stuff nightmares are made of and being debt free is high on my list of priorities. I would rather tie a ball and chain to my leg and walk around with it or go to a butterfly house than sheepishly pay money for all those years.
While I think its thoughtful (or greedy) that the minimum payment is so low. I have to say thanks but no thanks and I have a few reasons for why I will pay more than the required amount per month.
Interest is no joke!
I borrowed $25,000 and if I pay my minimum payment for 12 years plus wait until after my grace period to start paying my interest will be something like $10083.53 That is an ugly number (and also bad at Math, so that may be wrong) and while I may not feel it over that length of time, I simply cannot ignore it and play along.
My interest rate is variable and while I admittedly don’t know much about the economy, I just feel like it can only go up from here. The quicker, I get out the better.
Added to my interest is some random insurance fee but thankfully it doesn’t affect my principal.
I have sureties
… and they would have to pay if for some reason I can’t make my payments any more. How shitty would it be that, I was living it up and probably doing more than them while paying the minimum amount, and then they have to pick up my slack. That wouldn’t be fair to them.
I don’t want to be 30 with student loan debt
I don’t even want to be 26 with student loan debt. While I probably won’t be one of those super ninjas who pay off their debt in 9 months, I will do my best to knock it off in less than 5 years.
I want to travel
This sounds so cliché but I want to see other places and paying that money over that length of time would mean potential money will always be tied up and spoken for. If that means not travelling every year for the next couple of years because I am paying off this loan, I’m cool with that.
Some may argue that I could invest my money rather than pay off the loans fast, but mentally I can’t handle knowing I’m not doing my best to eliminate them. I love seeing my balance grow, but I love seeing my debt decrease more.
That’s essentially why I’m accelerating my payments and trying to get out of debt as fast as I can.
Do you feel that paying off debt early is important? If so, what are your reasons? If not, why do you feel that way?