4/8/12 Snapshot of Sallie Mae Loan Status

Paid down only about 4800 of this loan over a 4 year period.  Percentage-wise that’s a mere 10%.  This is a reminder for me that things need to change.  Paying the minimum isn’t working anymore.  At 300/month, the interest alone would take 6 months to pay off.  Then the remaining 1800 would go towards the principal.

I plugged the numbers into a loan payoff calculator.  The result is that at 300/mo it would take 193 months or 16 years to pay this off.  The loan payment after this year is supposed to shift to 121 payments at 453.51 starting 12/4/2012 and 9 at 296.23 starting 1/4/2023.   I will still qualify for income-based repayment based on my income for 2011 so it’s highly likely I won’t have to make any more payments for another year.  This is a unique opportunity to get my financial house in order and pay down as much of the principal as possible.  I don’t want to still be paying this off 5 years from now, much less 10, or pay $9000 in interest over that time.

Using The Inflation Calculator, What cost $9000 in 2000 would cost 11279.73 in 2010.  That’s approximately 25% more.  The math isn’t nearly as cut and dry with inflation, compounding, change in gas prices and all that jazz…but I honestly believe it makes more sense to make compromises now instead of down the road.  Especially when tax rates may change and the cost of living will inevitably be higher.