It didn’t take long for you PF bloggers to respond, which quickly lead to my decision to split the $2K down the middle; Half would go to my student loan and half would go to my savings. Since you all played such a pivotal piece in that decision making process, I thought it would only be right to fill ya’ll in with a little update.
In march my student loan balance was $25K. We are now in August and my balance is $20K. This means I have been a good Debt Ninja and have payed down $5K on my student loan over the last five months. As my balance continues to drop each month, so does the amount of interest I owe.
My student loans sits at 7% interest. Seven percent of $25K works out to $4.80 a day in interest. Seven percent of $20K works out to $3.83 a day in interest. This effectively means that after five months of following your advice, I am now saving a dollar a day without having to lift a finger. Pretty freakin’ awesome if you ask me.
I am totally motivated to continue forth and punch Sallie Mae in her stupid face. Before I go, however, I must solicit you finance geniuses for your advice once again. I have $14K in my savings account currently. I am tempted to take $10K of it and throw it at the student loan. Doing this though, would leave me with only about 3 months of E-fund and zero dollars towards my goal of saving for a house. It would be super sweet to knock out half my loan in one payment, but it’s scary as hell to part with all that money. If I don’t make the one large payment, I think I may just start throwing all $2K in discretionary income at the loan, but maintain about $10-$15K in my online savings. What to do, what to do?